WBJ #38 2011

The European Union’s ‘broken promise’ to Bulgaria and Romania

Polish shale gas could be commercially exploitable from 2014

Several foreign lenders are vying for control of Poland’s Bank Millennium

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WWW.WBJ.PL

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VOLUME 17, NUMBER 38 • SEP 26 – OCT 2, 2011 . z∏.12.50 (VAT 8% included) . ISSN 1233 7889 INDEX-RUCH-332-127

REAL ESTATE

Since 1994 . Poland’s only business weekly in English

Moment of truth

COURTESY OF ECHO INVESTMENT

Lokale Immobilia

• Park Post´pu sale • Hanza cornerstone • Hotel Bristol sold 16-18

Left turn?

SLD’s Katarzyna Piekarska says the winds of change are blowing in favor of Europe’s left 8

A guide to Polish business and industry

The future of Poland’s vaunted Eastern Partnership program will hinge on the fate of Yulia Tymoshenko

Przewodnik po polskim biznesie i gospodarce

Business organizations 21

2, 12-13

In this issue News . . . . . . . . . . . . . . . . . . . . . . .2-4 Industry News . . . . . . . . . . . . . . . . .5 Energy in Focus . . . . . . . . . . . . . .6-7 Listed Firms . . . . . . . . . . . . . . . . . . .9 Finance & Economics . . . . . . . . . .10 Opinion & Analysis . . . . . . . . . . . .11 Cover Story . . . . . . . . . . . . . . .12-13 Investing in Poland 2012 . . . .14-15 Lokale Immobilia . . . . . . . . . .16-18 Markets . . . . . . . . . . . . . . . . . . . . .20 The List . . . . . . . . . . . . . . . . . . . . . .21 Arts & Culture . . . . . . . . . . . . . . . .22 Last Word . . . . . . . . . . . . . . . . . . . .23

EAST NEWS

Interview . . . . . . . . . . . . . . . . . . . . .8

Poland still ‘sexy’

October surprise?

Poland is still a top investment destination, said experts at the launch of WBJ ’s Investing in Poland 2012 14-15

As the October elections approach, Law and Justice appears to be gaining momentum over Civic Platform 3, 11

NEWS

www.wbj.pl

SEPTEMBER 26 – OCTOBER 2, 2011

IN THE SPOTLIGHT

Numbers in the News

Viktor Yanukovych

z∏.4.52

Palestinian leader Mahmoud Abbas submitted his bid for recognition of Palestine as a state to the UN last Friday. The Palestinian president handed over a letter asking for the country to be allowed to join the UN as a state before giving an address to the General Assembly to put forward the case for admission. ●

Quote of the Week “The question we hear most often from our clients is which emerging market will bounce back from current levels.

Our answer is: Poland.”

Bank of America Merrill Lynch on Poland’s chances of recovery.

Figures in focus What a waste Total non-mineral waste generation, 2008, in kg per capita, selected EU countries

Remi Adekoya

On WBJ.pl

8,000 6,000 4,000 2,000

d

ia on Est

ria

lan Fin

urg

Au st

bo

UK

Lux em

nd Po la

an y

0 Ge rm

Looking for talent WBJ.pl sits down with Joel Perrenoud, president of talent acquisition company Futurestep, which recently set up an office in Warsaw. Log on to find out what the firm is looking for in Poland and how it views the Polish market.

Source: Eurostat

DATELINE

September/October SEPTEMBER 26 PROPERTY FORUM Event:

This event will provide an opportunity to discuss experiences with real estate development companies, financial institutions, administrators and occupiers of commercial space.

Location: Sheraton hotel, Warsaw propertynews.pl

27-28 GAS SUMMIT

Palestine’s UN bid

z∏.3,591 was the average wage in Poland’s corporate sector in August. That’s 5.4% more than in the corresponding period of 2010

10,000

Kabanos obtains EU certification The European Union has agreed to grant the certificate of Traditional Specialty Guaranteed to the Polish kabanos, a thin, dried specialty sausage. The decision to grant the special status to the kabanos was finalized after Germany, a leading producer of sausages in Europe, withdrew its objection.

is Poland’s position in the Fraser Institute’s annual ranking of economic freedom in 141 economies. It was ranked 65th last year.

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The Warsaw Stock Exchange marked its worst session of the year last Thursday, as a selloff hit markets worldwide. Investors opted out of emerging market currencies in favor of the US dollar.

Prices of oil, gold and copper sank, as did market indices. Poland’s main WIG index lost over 6%, while the blue-chip WIG20 lost more than 7%.

EU on a free-trade agreement that the Polish government hopes will be signed before its rotating EU presidency expires this December.

The experts WBJ spoke to in this week’s cover story (see pp.

12-13) all agree that the Ukrainian president simply did not expect such a fuss would be made over the arrest.

Polish Foreign Minister Rados∏aw Sikorski tried to

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Fra nce

WSE suffers black Thursday

All eyes will be on Ukrainian President Viktor Yanukovych ahead of this week’s Eastern Partnership summit in Warsaw, particularly with regard to his handling of the political uproar surrounding the arrest and detention of former Prime Minister Yulia Tymoshenko.

The trial of Ms Tymoshenko, viewed in the West as politically motivated, has cast a cloud over Ukraine’s negotiations with the

4% is how much the Polish economy will grow in 2012, according to Credit Suisse.

Ma lta

Polish President Bronis∏aw Komorowski, speaking at the general debate at the 66th General Assembly of the United Nations in New York on September 22, said solidarity between nations was the key to defending human rights and avoiding conflict. “An important point of Poland’s foreign policy remains solidarity with nations that strive for life in freedom, in democratic conditions and the respect for human rights,” Mr Komorowski said.

COURTESY OF THE EUROPEAN PARLIAMENT

Komorowski addresses UN Assembly

open the Ukrainian leader’s eyes at a conference in Yalta, Ukraine, on September 1518. “We will not compare your standards to the standards of the Belarusian regime, but to our standards,” Mr Sikorski said, adding that Ukraine should aim to meet Western standards of democracy, human rights and the rule of law.

Mr Yanukovych may be getting the message. He has raised the prospect of an overhaul of the Soviet-era criminal code, which experts say could lead to Ms Tymoshenko being released and allowed to take part in next year’s presidential elections.

Another possibility is that the judge presiding over Ms Tymoshenko’s trial could be replaced with a “more experienced” colleague, who would find that his predecessor had made procedural errors and release Ms Tymoshenko on a technicality.

The former PM’s trial is scheduled to resume this week, two days before the Warsaw summit begins. How Mr Yanukovych decides to play it out will be crucial to the future of EU-Ukraine relations.

was the exchange rate of the euro at the end of trading last Thursday.

EU

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Event:

The event will cover the communication and public perception issues currently facing the industry over three days of networking and discussion. Location: Kraków theenergyexchange.co.uk

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THE EASTERN PARTNERSHIP CONFERENCE

Event:

The Eastern Partnership Civil Society Forum, the Center for Eastern Studies and the Polish Institute of International Affairs invite you to an international conference which is an official event of the Polish Presidency and an accompanying event of the Eastern Partnership Summit, held on September 29-30 Location: Primate’s Palace – Conference and Exhibition Center, Warsaw eap.pism.pl

Accor ..........................................17 Grupa Capital Park ....................16 Pekao............................................9

OCTOBER 3 EXPO REAL Event:

Company index

At this year’s annual real estate expo consultants, banks, investors, expansion managers, towns and economic regions meet to make new contacts and do deals.

Location: Munich exporeal.net

Al Shaya Group ..........................18 Helios ........................................18 Peter Nielsen & Partners ..........5 Alior Bank ..................................5 IBM Polska ................................14 PGE ..............................................6 Alpine ........................................17 Immofinanz Group ....................17 PGNiG ..........................................6 Banca Intesa ................................9 Imtech Polska ............................16 Banco Comercial Portugues ......9 Inditex Group..............................18

PKN Orlen ......................7, 15, 20 PKO Bank Polski........................17

Bank Gospodarstwa Krajowego ....10 InterHealth Canada ..................18 PKO BP ........................................9 Bank Ochrony Ârodowiska ..........4 ITI Group ......................................9 PSE Operator ..............................6 Bank of America Merrill Lynch ..9 ITI Holdings ..................................9 Bank Pekao ................................18 J.W. Construction Holding ........18

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CORPORATE BOND MARKET CONFERENCE

Bank Zachodni WBK..................18 JEMS Architekci ........................17

Event:

This event bills itself as the largest seminar on the bond market in Poland.

Location: Warsaw Stock Exchange, Warsaw. gab.com.pl

BGK ............................................20 KGHM ........................................20

PTB Nickel ................................16 PwC ............................................14 Real ............................................18

Blumerang Investors ................15 KSC ..............................................5 Rosmarinum Investments ........17 BNP Paribas ................................9 Kulczyk Investments ..................5 Royal Starman Bristol ..............17 Bogdanka ....................................6 Lewiatan Business Angels ........15 Sberbank ..................................5, 9 BRE Bank ....................................9 LHI ..............................................16 Siódemka ..................................18

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PRCH RETAIL AWARDS

Event:

At this event the Polish Council of Shopping Centres will announce the winners of the PRCH Retail Awards 2011.

Location: Warsaw prch.org.pl

Bulanda, Mucha - Architekci ....16 Lubawa ........................................8 Skanska Property Poland..........16 BZ WBK ......................................10 Marriott International ................17 Studio MTS ................................16 C&A ............................................18 Mayland Real Estate..................18 Carlo Tassara ..............................5 Microsoft ....................................23 Citigroup ....................................10 Millennium Bank ........................9

Tauron ..........................................6 Time Warner ................................9 TNS OBOP ....................................3

Colliers International ................18 Miller, Canfield, W. Babicki, A. TVN ..............................................9

13-15 XVII POLISH YOUR MONEY FINANCIAL FORUM 2011 Event:

The event hosts debates, conferences and seminars on international financial markets.

Location: Palace of Culture and Science, Warsaw twojepieniadze.com.pl

Credit Suisse................................9 Chelchowski & Partners ..........13 UniCredit ......................................9 Cushman & Wakefield ..............16 MONTI ........................................16 Echo Investment ........................17 Multikino ......................................9 Enea ............................................6 NBP ............................................10 Energa ..........................................6 Nordea Bank ..............................10

Valad ..........................................18 Vivendi ..........................................9 Wood & Company ........................5

Energy ..........................................7 NUS Consulting Group ................6 WSE ..........................................2, 5 Goldman Sachs............................9 Onet.pl ..........................................9 X-Trade Brokers gowebtrade.com ........................20 Orbis Hotel Group ......................17 Dom Maklerski SA ....................20

SEPTEMBER 26 – OCTOBER 2, 2011

NEWS

www.wbj.pl

3

Parliamentary elections

PiS gains on PO as election day approaches The opposition is picking up speed, but it remains to be seen if it can catch up to the ruling party

Presidential choice COURTESY OF FLICKR/WYBIERZPIS.ORG.PL

Three weeks before parliamentary elections, a September TNS OBOP poll had the ruling Civic Platform (PO) party supported by 33 percent of the electorate, with their main rivals Law and Justice (PiS) close behind at 26 percent. The Democratic Left Alliance (SLD) was backed by 8 percent of Poles, the Polish Peoples’ Party (PSL) by 6 percent and Palikot’s Movement (RPP) by 4 percent.

The figures reflect a recent trend of PiS gains (+4 percentage points from the previous survey) and PO losses (-2) among voters.

everything to demobilize PO’s electorate, is the only way for them to win,” said Mr Trzeciak.

But PiS’s recent advance in the polls could ultimately benefit the current government, as the prospect of the opposition actually regaining power could energize PO voters, he added.

Jaros∏aw Kaczyƒski’s party is hoping to overtake PO ahead of the October 9 elections According to Sergiusz Trzeciak, a political analyst at Collegium Civitas, PiS’s strategy of wooing citizens who are

normally apolitical is proving to be the right one.

“PiS doesn’t have to mobilize its [already motivated]

electorate, they are trying to appeal to those who are traditionally not interested in politics. This, as well as doing

Meanwhile, in an interview for the Polish Press Agency (PAP), President Bronis∏aw Komorowski said that in choosing the politician who will form the next government, he would decide based not only on the election result but also on the winner’s ability to form a coalition.

“I would like to remind you that in order to create an effective government in Poland, you need to have a majority in parliament. And so

while making that decision, I will take into consideration both the election result and a realistic coalition ability,” said Mr Komorowski.

This was widely interpreted as an allusion to the fact that even if PiS were to win the elections, Mr Komorowski might designate someone other than the PiS leader Jaros∏aw Kaczyƒski to form a government.

Current Prime Minister Donald Tusk has much more room to maneuver when it comes to forming a coalition.

Of the five parties likely to make it to parliament, Mr Kaczyƒski has ruled out a coalition with SLD or RPP, while PSL has made it clear they are unlikely to form a coalition with PiS. A PO-PiS coalition is also very difficult to imagine.

Remi Adekoya

PO’s campaign

Opposition leader Jaros∏aw Kaczyƒski has renamed the Tusk bus the “I can’t do anything” bus Ahead of the upcoming parliamentary election on October 9, Prime Minister Donald Tusk has taken to traveling around Poland on a specially designed bus to promote his Civic Platform (PO) party. The coach, dubbed the “Tuskobus” by the Polish media, will visit different cities on each day of its tour. So far, the PM has made stops in the KujawskoPomorskie, Mazowieckie,

Wielkopolskie and Zachodnio-Pomorskie voivodships.

On Tuesday, the prime minister said that both PO and opposition party Law and Justice (PiS) could win the election, and during a visit to Rzecin Mr Tusk rallied his audience by saying, “those with reason in their brain will vote for PO.” But as has been the case throughout his trip, Mr Tusk had to deal with angry residents demanding answers to their questions about Poland’s low wages and the perception that the government isn’t doing anything to make things better.

Mr Tusk, who is filming the journey for his blog, said in video footage on his site that “Poland is a great place, it may be difficult for some, but it is truly great.”

Other PO party members including Foreign Minister Rados∏aw Sikorski and Sejm Speaker Grzegorz Schetyna are accompanying Mr Tusk on his tour.

Meanwhile, PiS leader Jaros∏aw Kaczyƒski has criticized the tour, saying that it was clear to him the prime minister intended to go on a “worldwide” election campaign and that he himself was not going to

go on a “Kaczobus.”

At a press conference in Bydgoszcz Mr Kaczyƒski called the prime minister’s vehicle the “I can’t do anything bus.”

“Four years ago Tusk promised that life would get better for everyone. Now he travels around the country and has to answer questions on how to make ends meet,” Mr Kaczyƒski added.

On Tuesday, Tadeusz Iwiƒski from the Democratic Left Alliance party also criticized the prime minister, asking how it was possible to lead Poland or the European Union from a Ella Pa∏ka bus.

COURTESY OF FLICKR/PLATFORMARP

PM Tusk takes campaign on bus tour

Mr Tusk will probably face more angry citizens on the next leg of his tour around Poland

4

NEWS

www.wbj.pl

SEPTEMBER 26 – OCTOBER 2, 2011

Banking

EU ‘breaks promises’ to Romania and Bulgaria

VP of Polish bank detained in connection with fraud charges

Interior Minister Jerzy Miller said he was “sad” the countries were rejected entry into the Schengen zone

Marek S. allegedly perpetrated credit fraud involving almost z∏.2 million

Halfway into the Polish presidency of the EU council, economic hardship continues to put the idea of free movement within the EU, and Polish calls for solidarity and openness, to the test.

Both Finland and the Netherlands have blocked entry of the EU’s newest members, Bulgaria and Romania, to the border-free Schengen area.

The outcome of the vote among interior ministers was widely expected, but Poland has nevertheless expressed its disappointment.

“This evokes in me above all rather sad conclusions on mutual trust between EU member states,” Polish Interior Minister Jerzy Miller, who presided over the meeting, told journalists after the vote.

The Polish presidency of the EU council had presented a proposal for the full entry of Bulgaria and Romania into

COURTESY OF THE EUROPEAN PARLIAMENT

Schengen zone

Mr Miller saw the vetoes as evidence of a lack of trust among EU members Schengen. Finland and the Netherlands vetoed the draft, arguing Romania and Bulgaria still had some work to do in tackling corruption and organized crime.

“At a time when we are asked for financial solidarity, we need the trust of our citizens. In fact, Romania and Bulgaria got in the EU too early, that’s why we have the commission monitoring [corruption and organ-

ized crime] and that’s why we are taking Schengen enlargement so seriously,” Dutch Immigration Minister Gerd Leers told reporters.

Mr Miller said that Bulgaria and Romania have made “remarkable progress” in the fight against corruption and organized crime and are “practically guarding EU external borders” without formal obligation to do so, and fulfill all the

necessary conditions in their EU accession treaties to become members of the Schengen area. “Today, promises have been broken,” Mr Miller said.

“We live in hard times, [but] such moments require that we support each other,” he added, echoing the words of the speeches made by Poland’s president and prime minister in the European Parliament earlier in Alice Trudelle September.

A court in the city of ¸ódê ordered the arrest of Polish banker Marek S. on charges of fraud last Wednesday. The accused tendered his resignation as vice president of Poland’s Bank Ochrony Ârodowiska (BOÂ) the same day.

Marek S. (Polish law precludes the publication of the last name of those accused of a crime) will now be detained for three months. The reason given for the decision was the suspicion that he could attempt to impede the investigation if not held in custody, Rzeczpospolita reported.

The man is accused of committing credit fraud involving nearly z∏.2 million, the paper wrote, adding that he will remain in custody while the court hears the case against him.

The allegations do not relate to fraud detrimental to BOÂ, the bank wrote in a statement.

“The management board of Bank Ochrony Ârodowiska

hereby declare, in reference to media reports about the prosecutor’s order to detain a vice president of the bank’s management board, that they have no knowledge of this case being linked in any way to the activity of BOÂ.”

Marek S. is facing a total of 15 charges, 14 of them connected to credit-card fraud and one to impeding the course of justice. The charges reportedly relate to actions deemed to be detrimental to two banks, neither of which have been named.

According to the prosecutor, the charges concern actions taken over the period of July 2007 – February 2009.

BOÂ announced in an English-language statement that “Mr Marek Kazimierz Serafiƒski, vice president of the bank management board, has tended his resignation from his function in the bank management board 21 September 2011.”

The banker was vice president of BOÂ from December 2008. Prior to that he had been associated with PKO Bank Polski for 13 years.

Gareth Price

Pick up the latest edition of Warsaw Business Journal Group’s popular series of busines guides.

The publication features Trendbook Poland, a comprehensive view of the business trends shaping Poland’s market.

To order, e-mail kwilinski@wbj.pl or call (+48) 22 639-8567 ext. 255

SEPTEMBER 26 – OCTOBER 2, 2011

INDUSTRY NEWS

www.wbj.pl

5

Privatization

Poland’s largest sugar producer up for sale A public offering of shares in Poland’s state-owned National Sugar Company (KSC) has been launched, with the Treasury selling 79 percent of KSC’s share capital. The price per share is set at z∏.1.60, with the value of the stake amounting to z∏.1.2 billion.

Shares will be available to employees of the firm and sugar beet cultivation companies that have contracts with KSC. In total around 18,000

people will be entitled to buy shares.

“Now the workers and growers of the National Sugar Company, which is directing a public offering, will be able to have a real impact on the future of the company and its value,” said Treasury Minister, Alexander Grad.

The president of KSC, Marcin Kulicki, said the firm’s employees will now have an opportunity to become coowners.

“By taking part in privatization, they will gain the opportunity to decide how it will look tomorrow … while achieving the benefits of the

profits earned by the company,” he said.

KSC is one of the largest sugar producers in Europe, with the company valued at z∏.1.6 billion. Last year its Kruszwica plant, the largest of its seven plants, processed 795,000 metric tons of sugar beet and produced 119,000 tons of sugar.

In a statement on its website the Treasury Ministry said a list of those entitled to acquire shares would be published on October 4, with the process leading to the conclusion of sales expected to take one year.

SHUTTERSTOCK

The firm’s shares will be made available to its employees and contractors

KSC’s employees and partners have a sweet opportunity to become co-owners

David Ingham

Banks

Jan Kulczyk invests in Alior Bank on the block?

Afghanistan gold search Kulczyk Investments, the company owned by Polish business mogul Jan Kulczyk, has made a large investment in an enterprise currently searching for gold in Afghanistan, company spokesperson Justyna Kobos told WBJ. The Polish entrepreneur is now one of the main shareholders in the exploration and

mining company Centar, which has bought a concession to search for gold in Afghanistan.

Exploration work in the concession area has already started, with more than 200 employees, including geologists and engineers, working on the site.

Kulczyk Investments has reportedly invested “tens of

millions of z∏oty” in the company, Dziennik Gazeta Prawna wrote. Ms Kobos declined to give further information.

Afghanistan has become a prime spot for companies searching for raw materials in recent years. The mountainous country holds large deposits of iron ore, copper, cobalt, lithium and gold.

Gareth Price

Legal News

COURTESY OF ALIOR BANK

Contact: Miros∏aw Stefanik ms@pnplaw.pl

Could Alior be sold to Russia’s largest bank?

Speculation is rife that the Polish bank could be sold to Russia’s largest lender Poland’s Alior Bank could go up for sale as early as next year, according to Italian business daily Il Sole 24 Ore. Along with several unidentified private equity funds, the report cited Russia’s largest bank, Sberbank, as one of the interested parties.

“If Alior is up for sale, Sberbank would be one of the candidates, but in our view Sberbank will not pay a premium price for a bank,” Micha∏ Konarski, a banking analyst from Wood & Company, told WBJ.

Because Alior Bank is not listed, it is difficult to assess the quality of the bank, experts said, but it is in a good liquidity position and it is also profitable.

Alior Bank is due to be listed on the Warsaw Stock Exchange in 2013.

Carlo Tassara, a holding company owned by French financier of Polish descent Romain Zaleski, is the principal owner of Alior Bank.

According to the Italian report, the firm, which conducted its business mainly in the metallurgy sector until the mid-1990s, is looking to extend financing from its lenders.

As a condition for the

extended funding, the banks have requested that Carlo Tassara rid itself of non-core assets, including its financial ones, the newspaper said.

The president of Alior Bank, Wojciech Sobieraj, had previously denied reports that the Italian holding company was having problems.

But he also said that he did not exclude the possibility of entering into a joint-venture agreement with another banking player in the future, Gazeta Wyborcza reported.

When contacted by WBJ, press representatives from Alior Bank said they were unwilling to comment on the reports.

Ella Pa∏ka

Minimum wage in 2012 On September 13, the government decided that the minimum monthly wage for work in 2012 in Poland will amount to z∏.1,500, an increase of 8.2 percent. This year the minimum wage for work is z∏.1,386.

New tax treaty with the Czech Republic Poland’s Ministry of Finance announced on September 13, 2011, that it had signed a new agreement with the Czech Republic related to income tax. The deal is aimed at avoiding double taxation and at counteracting tax evasion. The new agreement will replace an agreement signed in 1993.

The new provisions will enable increased exchange of tax information between the two countries. The treaty will come into force after it is accepted by parliament and ratified by the Polish president.

Tax on undisclosed income The Supreme Administrative Court has

decided that those who are found to have not declared income tax will have to pay 75 percent tax on the amount that was not declared. This only applies to Polish residents and to money earned in Poland.

There are no legal measures which would allow for taxing undisclosed income obtained by a non-resident outside of Polish territory (sygn. II FSK 1192/09).

Working pensioners will be allowed to recalculate their pensions President Bronis∏aw Komorowski has signed an amendment to an act concerning pensions and disability payments that are paid from the Social Insurance Fund. Insured persons will now be able to recalculate the value of their pensions if they suspend collection of these pensions after September 30 for at least 18 months. They must also continue working for the same employer without terminating their employment contract. ●

BROUGHT TO YOU BY PETER NIELSEN & PARTNERS LAW OFFICE

6

ENERGY IN FOCUS

www.wbj.pl

Coal power

SEPTEMBER 26 – OCTOBER 2, 2011

Gas

Energa plans z∏.6-7 billion Poland takes steps to power plant investment liberalize its gas market Polish state-controlled utility Energa has announced a tender to select the main contractor to build a coal-powered block in its already existing power plant in Ostro∏´ka, northeastern Poland. The new facility will provide between 850-1000 MW of power.

The company values the investment at z∏.6-7 billion, which would make it Energa’s largest tender to date, the company wrote in a statement.

Energa will take out loans to pay for 70 percent of the value of the project and use its own funds to pay for the remaining 30 percent.

Selection of the contractor is slated for the second half of 2012, while construction could begin later in the same year.

The company has already signed a contract with transmission system operator PSE Operator which sets a timetable for the enlargement of the distribution network in northeastern Poland. This will enable it to connect the block

Industry players should start to feel the change in 2012

COURTESY OF ENERGA

The firm has launched a tender to find a contractor to carry out the work

The new plant will be built at Energa’s Ostro∏´ka site to the national grid.

The main supplier of coal to the facility will be Bogdanka, with which the power plant has signed a 20-year contract.

The investment has also been registered with Poland’s CO2 emissions trading system.

Energa CEO Miros∏aw Bieliƒski told Parkiet that construction of the new block will take at least four years.

Three other power groups also controlled by the state –

PGE, Enea and Tauron – are planning construction of new coal-powered blocks.

Poland relies on coal for around 90 percent of its electricity needs but is under pressure from the European Union to reduce its reliance on the highly polluting fossil fuel. Under the EU’s renewable energy plan Poland is obliged to source 15 percent of its energy from renewables by Gareth Price 2020.

Poland’s Energy Regulatory Office (URE) is now consulting with current and potential gas market players to publish a road map for liberalizing the market in the beginning of 2012. URE head Marek Woszczyk recently said he hoped to start deregulating gas prices for industrial customers next year.

According to Henryk Zysko, manager at NUS Consulting Group, an energy management consultancy, the development comes none too soon, since commercial users are now “starving for options.”

“Gas is the second-most important utility in this country after electricity, and liberalizing it will bring a tremendous benefit to commercial end users, just like when the electricity market was liberalized four years ago,” he said.

Another important step is a newly amended law which, when it comes into force in mid-October, will waive the obligation for gas importers to store a certain percentage of it

in the country.

This obligation strongly favored the state-owned gas monopoly PGNiG, which currently controls all storage facilities in Poland, as well as 98 percent of gas production, import, distribution, and wholesale and retail trade.

The amended law also doubles the amount of gas a company can sell before it must maintain gas reserves of 100 million cubic meters annually.

According to Mr Zysko, major foreign companies,

including Czech, German and Scandinavian firms, will look to enter the Polish market “in the very near future.” Local electricity companies are also likely to try to take advantage of the new regulation to diversify, he added.

The energy regulator hopes that potential newcomers could co-finance the building of gas infrastructure in Poland, an important issue both for security of deliveries and for future growth of the sector.

Alice Trudelle

Who wants gas?

Volume and structure of gas sales to final customers (in %), 2010

2.2%

1.2% 0.6%

0.3% End users – industry

10.3%

Households End users – commerce and services Wholesale customers

28.4% 57%

Distribution system operators Transmission system operator (Gaz-System SA) Export Total: 14.417 bcm Source: PGNiG

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SEPTEMBER 26 – OCTOBER 2, 2011

ENERGY IN FOCUS

Shale gas

COURTESY OF KPRM

PM Tusk: commercial extraction of shale gas possible in 2014

Shale gas extraction in Poland is “just around the corner” said Prime Minister Tusk

Poland could achieve gas independence by 2035, said the prime minister. But plenty of hurdles still lie ahead According to Prime Minister Donald Tusk, commercial production of Polish shale gas may begin as soon as 2014.

“Being moderately optimistic, we think that in 2014 there will be commercial extraction, so it’s really just around the corner,” Mr Tusk told reporters while visiting Polish gas monopolist PGNiG’s shale gas concession in Lubocino, in northern Poland.

In the opinion of Bartosz WiÊniewski, an analyst at the Polish Institute of International Affairs, “2014 will be demanding, but it is not an entirely unrealistic target. The state can speed things up,” he said, adding that political will would be best used in streamlining bureaucratic procedures. “The key is not to overregulate.”

The prime minister added that Poland may be able to fully rely on its own gas resources by 2035. At present Poland is dependent on imported gas, sourced mainly from Russia. The US Department of Energy has estimated Poland’s shale gas reserves at 5.3 trillion cubic meters. With such large amounts, Poland could even become a net exporter.

“After years of dependence on our large neighbor, today we can say that my generation will see the day when we will be self-reliant when it comes

to gas,” Mr Tusk said.

Environmental concerns Aware of the heavy criticism shale gas extraction has come under from environmentalists, Mr Tusk said that exploitation of shale gas deposits will not endanger the environment. He added that the extraction of shale gas is a strategic challenge for Poland and should not be influenced by the interests of a “foreign lobby.”

At a conference organized

by WBJ last week, PKN Orlen chief economist Adam Czy˝ewski said his company had not observed any evidence of negative environmental impact from drilling. Reports of environmental threats from shale gas are exaggerated, he added.

But there are fears that the European Union could create regulations that would make it difficult for Poland to develop its shale gas industry.

The European Commission is not planning to propose any new legislation regarding shale gas, but it is currently reviewing whether EU environmental laws would cover shale gas, Dow Jones Newswires reported a spokesperson for Energy Commissioner Günther Oettinger as saying last week.

Local issues Another important roadblock might come from drilling sites being located on protected areas, which account for 30 percent of Polish territory.

Local populations being disturbed by the noise, fumes and

traffic near drilling sites, could also be challenging.

“Exploiting shale gas is very detrimental for municipalities,” said Mariusz Sagan, director of the department of strategy and investors services for the city of Lublin.

The region around Lublin is believed to sit on top of some of Poland’s largest shale gas deposits, and city authorities are already in talks with four American companies, as well as studying the possibility of creating service centers for shale gas, said Mr Sagan.

But according to him, current legislation would give local government too small a share of profits from shale gas extraction. “Unless the law changes it will be difficult to profit from shale gas extraction,” he said.

Propping up pensions?

In Lubocino, Mr Tusk said that his aides, in cooperation with Norwegian and Canadian experts, are preparing the relevant legal provisions to ensure Poland can profit from shale gas extraction. The proposed scheme envisions the introduction of fees for extraction companies that would be used to shore up Poland’s pension system.

“Macroeconomic policy will be the key to dealing with shale gas,” said Orlen’s Mr Czy˝ewski. Absorbing eventual revenues, as Poland does with EU funds, will be crucial, and financing pensions would be an interesting option, he added.

Alice Trudelle

www.wbj.pl

7

INTERVIEW

www.wbj.pl

SEPTEMBER 26 – OCTOBER 2, 2011

Politics

Poles return with few savings

The return of the left?

The dream of leaving Poland for a country in the West and then returning with a large amount of money is over, according to new research by the Strategic Advisory Centre in Kraków, as cited by Rzeczpospolita. The paper, called “Direction Silesia,” studied 18,000 families from Poland’s Silesia voivodship. The highest percentage (23%) of surveyed migrants returned to Poland with savings of between z∏.5,000 and z∏.10,000, while one in four returned with no savings at all.

MP Katarzyna Piekarska, vice chairperson of the Democratic Left Alliance (SLD) and leader of the party’s branch in the Mazowieckie voivodship, speaks with WBJ about her party’s policies, its priorities for the campaign and her predictions about the outcome of the upcoming parliamentary elections Ewa Boniecka: SLD is the only party running for election that is fighting for votes under the leftist banner. How would you view your party’s potential in this respect?

Katarzyna Piekarska: Poles are now in a situation where they can evaluate all parties not only on the basis of their words, but also by their performance, as all have been in power at some point in the last 20 years.

So under such circumstances, voters can make a conscious decision about who they want to choose.

And if you dispassionately evaluate the SLD-led governments that were in power first from 1993 to 1997 and then

Lubawa closer to NATO contract Lubawa, a company that specializes in ballistic protection equipment, is closing in on a contract worth z∏.80 million for the supply of 9,000 bulletproof vests for the Italian armed forces. The company’s offer has qualified for the third and final phase of a bid organized by the NATO Maintenance and Supply Agency, Parkiet reported.

changes and it is the only party which has opened itself up for new, young leaders and activists with fresh energy and ideas.

I believe that one of our assets is that we are not standing still, with tired politicians at the top, as is the case in other parties. Poland needs some new vigor and far more ambitious policies, as well as the will for further reforms. I believe that the greatest mistake of the government of Civic Platform (PO) and the Polish People’s Party (PSL) is that they did not have the courage to undertake serious reforms, first in the public finance sector, which is what all experts have been saying should have been undertaken for at

“Only someone intent on political suicide would agree to a coalition between SLD and PiS” from 2001 to 2005, you have to admit that it was not lost time for Poland.

In 2004, Leszek Miller, who was prime minister at the time, achieved Poland’s entry into the European Union. The government then undertook the enormous legislative task of preparing over 1,000 muchneeded bills, which were all approved by parliament.

More Polish babies in the UK Polish women gave birth to almost 20,000 babies in England and Wales in 2010, twice as many as those conceived by Polish women living in Poland, according to UK Department of Health figures. Poles are giving birth to more children than any other minority in the UK, with 2010’s total representing a six-fold increase from 2005 ●

Nevertheless, SLD later lost consecutive elections and the party is now fighting for power after years of being in opposition. So how do you assess your party’s current assets?

SLD recently went through the process of making generational

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least two years following the first signs of an approaching crisis.

income and the largest poverty zones. Current statistics show that 16 million Poles live below the social minimum [a measure of costs of living based on not only sustaining life, but also raising children and maintaining a minimum of social ties]. It is unacceptable that Poland, an EU member state, has so many children who are hungry.

I think that if we can spend millions of z∏oty on a war in Afghanistan, then we cannot claim that there is no money to provide children with a warm meal in school. We have areas where money is wasted, for example in paying for the over 60,000 new state employees that have been hired in the current term of government.

There are other areas where we spend too little, like on social provisions, education and on health care.

I ask, why do we continue to spend z∏.100 million every year for the Church Fund, when we know that church goods taken during communist rule have already been compensated for and even the commission dealing with this issue has been liquidated, yet the repayment process still goes on.

There are many other paradoxes in how public money is allocated by the Tusk government, which generally lacks a long-term vision for economic and social policy.

What are your main proposals for economic policy?

Our economic program rests on five pillars: We want to speed up economic growth to 5 percent, repair public finances, create business-friendly conditions, introduce innovation and technological progress, and assure fair division of economic benefits.

All of these proposals are explained in detail in our program. And as far as taxes are concerned, we want to simplify the system by liquidating tax privileges for the rich and by introducing a special tax on financial institutions.

This is a realistic program that will lead to increased levels of employment, a gradual equalization of the retirement age for both men and women and the opening of better access to the job market for young people.

There was a time when SLD paid a lot of attention to moral issues. But recently it looks like SLD is pushing these issues away from its campaign. Why is that?

We are not neglecting these issues, which are very important to our party, and I fully recognize that ethical problems such as [state funding for] in vitro [fertilization], abortion and civil unions are controversial for many people, but they are an important part of human liberty.

I do not think that the present, restrictive law on abortion will be changed, but I believe that a law allowing women to receive [state funding for] in vitro fertilization could be passed during the next parliament. I also hope that a bill about civil unions will be passed by the next parliament.

Your social program makes many generous promises to increase social benefits. How do you expect to achieve these promises financially?

Governments on the right treat social policy only as an economic burden that must be avoided. Social expenditure in Poland is the lowest in the European Union, while we have the greatest divisions in

In terms of foreign policy, SLD echoes PO’s pro-EU stance, while it opposes PiS’s nationalistic vision. Do you feel cooperation is possible with PO in foreign policy?

It’s harmful that foreign policy is the subject of domestic political conflict between PO and PiS. I remember very well that when [SLD co-founder] Aleksander KwaÊniewski was presi-

COURTESY OF SLD

8

Katarzyna Piekarska says the current Civic Platform-led government lacks a long-term vision for social policy dent, foreign policy was excluded from domestic politics.

I value President Bronis∏aw Komorowski’s performance when it comes to foreign policy. He has improved cooperation in the Visegrad Group and revived the Weimar Triangle.

We support all efforts that ensure Poland’s strong role in the EU by developing good relations with our neighbors and by maintaining close ties between the EU and the US. You are one of only six women in Poland in a top spot on an election list. Why do you think this is, when SLD supported a law mandating that at least 35 percent of election lists comprise women?

Well, on my particular list 50 percent of the candidates are women. And SLD’s lists generally boast 40 percent women candidates. I regret that there are no more women holding first place on our lists, that such great personalities as professor Ma∏gorzata WiniarczykKossakowska and professor Maria Szyszkowska are in lower spots.

Still, I believe that if a woman has a strong personality, then she can gain support.

Today in Poland, there is a positive trend that both men and women are voting more for women candidates.

Some observers claim that SLD leader Grzegorz Napieralski is so eager to get into government that he would consider forming a coalition with PiS. Do you think this is possible?

Grzegorz Napieralski would not commit political suicide and

only someone intent on political suicide would agree to a coalition between SLD and PiS. The scenario is completely out of the question, because we have no common goals in our programs. SLD and PiS have an entirely different view on the role of the state and its relation to its citizens.

If PO were to win and they needed a coalition partner to establish a government, would SLD consider being a potential partner?

I do not like to speculate on possible coalitions following the election. But if I have to give you my personal opinion, I think that if PO wins and they need a partner to form a stable coalition government, then a PO-SLD government would be the best option for Poland.

The government would then be able to undertake reforms to the financial system, and it would conduct good foreign policy. But I think that my party should agree to enter into a coalition with PO on the condition that at least some parts of the SLD program, linked to social and moral issues, are implemented.

What outcome would you find satisfactory for SLD in October’s election?

At least 18 percent of the vote.

And I want to add that good results for SLD would have a positive impact on social democratic parties throughout Europe. I think that after the last few years, when social democratic parties have been weaker, the wind is now blowing in favor of the left. ●

SEPTEMBER 26 – OCTOBER 2, 2011

LISTED FIRMS

Banks

www.wbj.pl

Media

Written bids submitted Time Warner and Vivendi lining up for Millennium sale for TVN takeover French giant BNP Paribas looks to be the front-runner to take over Portuguese BCP’s Polish arm

COURTESY OF WIKIMEDIA COMMONS

Portuguese bank Banco Comercial Portugues received three written offers for its 65.51 percent stake in Polish asset Millennium Bank, the bank said in a statement last week.

The three written offers came from French bank BNP Paribas, and Polish banks Pekao and PKO BP. The bank said it had also received verbal offers. Other banks that reportedly expressed interest included Italy’s Banca Intesa and UniCredit, Poland’s BRE Bank and Russia’s largest bank, Sberbank.

The deadline to submit offers ended on September 19.

Tomasz Bursa, an analyst from Ipopema Securities, told WBJ that he believed BNP Paribas was “very determined” to purchase the bank.

The sale of Millennium Bank comes at a time when banks in Portugal are taking

The sale of the Polish broadcaster could happen as early as this year

BCP wants to sell 65.5 percent of Millennium steps to comply with their country’s central bank requirements, stipulated in this year’s €78 billion bailout program put forth by the International Monetary Fund, the European Commission and the European Central Bank.

Under the bailout plan, Portuguese banks have to raise their capital ratios and cut loan-to-deposit ratios over the next two years. In exchange for the changes, they will receive €12 billion for recapitalization efforts and a €35 billion plan

that will allow them to issue government-backed guaranteed bonds.

The sale of a 65.51 percent stake in Bank Millenniumcould net BCP around €850 million at the bank’s current share price.

The bank emphasized that no decisions have been made regarding the sale of its Polish banking unit, but analysts say it is unlikely that BCP will be able to hold off on the sale for long.

Ella Pa∏ka

Time Warner and Vivendi are emerging as the two companies most likely to purchase of Polish television firm TVN. The Financial Times and Polish business daily Puls Biznesu, both citing unnamed sources, reported the two global media groups were interested in TVN last week.

ITI Group, which currently owns a 55.64 percent stake in the Polish company, has been in discussion with the two media groups and a deal could be concluded by the end of the year, Puls Biznesu reported.

In July, ITI said it wanted to sell its 55.64 percent stake in TVN. “There is no preferred buyer, and the main determinant in selecting one will be the price,” ITI Group CEO Wojciech Kostrzewa said last week.

As of Friday, September 23, TVN’s market capitalization was z∏.4.6 billion. The FT

reported that TVN could be worth as much as z∏.6.2 billion, based on a calculation of eight times this year’s earnings before interest, tax, depreciation and amortization.

TVN would fit nicely with Time Warner’s stated strategy of investing in fast-growing markets or media segments.

Vivendi, the owner of Poland’s Cyfra+ satellite TV platform, would likely focus its attention on TVN’s own “n” satellite TV platform.

Jean-Bernard Levy, chairman of Vivendi, was quoted by Dow Jones Newswires as saying that the company is “very attentive” to what is happening in Poland.

The ITI Group has been responsible for the development of some of Poland’s most recognizable and popular media units, including television stations TVN and TVN24, cinema chain Multikino and internet portal Onet.pl.

In a report released on Friday, Goldman Sachs changed its stance on TVN from “neuElla Pa∏ka tral” to “sell.”

9

IMF: GDP to grow 3.8% Poland’s economy will grow by 3.8% this year, the International Monetary Fund said in its World Economic Outlook report. The organization said that the recovery “has already been established” in Poland, and the country should therefore use this time to rein in its government deficit. The IMF said Poland was a member of a group of countries that also included Germany, Switzerland and Sweden, where the economy is operating close to precrisis levels.

Poland to emerge first from crisis?

Economists from Credit Suisse have forecast a surprisingly high 2012 economic growth level of 4% for Poland, reported Puls Biznesu. Moreover, according to Bank of America Merrill Lynch economists, after the ongoing crisis in the euro zone passes, Poland will be first of the emerging markets to bounce back from low currency rates and low stock valuations.●

10

FINANCE & ECONOMICS

www.wbj.pl

Industrial output

SEPTEMBER 26 – OCTOBER 2, 2011

Macroeconomics

High production figures Unemployment falls, just a flash in the pan? retail sales growth quickens 16

12

8

4

%

“Industrial production statistics show relatively high volatility and therefore a single reading could reflect noise rather than trend. All the more so given that the August positive surprise came after two consecutive months of negative surprises,” Citigroup analysts wrote in a report.

Economists forecast more sedate output growth for the

rest of the year, due to flagging demand in the euro zone.

“In subsequent quarters one should expect a deceleration in output growth, following the weakening of external demand,” BZ WBK analysts wrote.

Citigroup predicts industrial output will grow at a rate of “below 5 percent y/y” in the coming months. Gareth Price

Two key economic indicators for August suggest Poland’s economy is not being dragged down by troubles in the euro zone just yet. However, economists have pointed to signs that indicate positives may soon start to dry up.

On the back of seasonal employment opportunities and strong economic growth, the country’s jobless rate fell in August to 11.6 percent from 11.7 percent the month before, matching economists’ expectations. The unemployment rate has now fallen for six consecutive months.

However, as euro-zone economies continue to lose steam and seasonal job opportunities become scarce, future months will likely see the trend reversed. “In our view the positive tendencies on the Polish labor market are slowing and in the upcoming months the

unemployment rate will be picking up gradually,” BZ WBK analysts wrote in a research note.

Some signs indicate the strength of the labor market may already be starting to fade – the number of jobs in the manufacturing sector, for example, dropped by 7,000 month-on-month in August.

“This sector is highly exportoriented, so these figures show

that the main culprit behind the slowdown ... is waning demand of the main Polish trade partners,” BZ WBK wrote.

Separately, Poland’s statistics office released retail sales figures showing above-forecast growth of 11.3 percent yearon-year in August.

Analysts believe retail sales will face considerable pressure later in the year.

Gareth Price

The joys of summer Unemployment rate (in percentage), August 2010-August 2011 15

14

13

12

11

10 Au Se gust pte 20 mb 10 er Oc 201 tob 0 No er 2 vem 01 b 0 De er 2 cem 01 be 0 r Jan 2010 ua Feb ry 20 rua 11 ry 2 Ma 011 rch 20 Ap 11 ril 20 Ma 11 y2 0 Jun 11 e2 01 Jul 1 y2 Au 01 gu 1 st 20 11

Year-on-year growth in industrial output (in %), August 2010-August 2011

Source: Central Statistical Office

Poland’s industrial output grew faster than expected in August as production of metals and motor vehicles rose strongly.

Output grew 8.1 percent year-on-year last month, up from 1.8 percent in July and well above the market consensus forecast of 3 percent.

The reading has lowered the chances of Poland cutting interest rates any time soon, analysts say. “High growth in production and PPI [Producer Price Index] calls against a hurry in monetary easing,” BZ WBK economists wrote in a report.

Nevertheless, the data has not been viewed as evidence of a strong, long-term upswing in the strength of the manufacturing sector.

Economists still harbor worries about upcoming months

Just a blip?

Au Se gust pte 20 mb 10 er Oc 201 tob 0 No er 2 vem 01 b 0 De er 2 cem 01 be 0 r Jan 2010 ua Feb ry 20 rua 11 ry 2 Ma 011 rch 20 Ap 11 ril 20 Ma 11 y2 0 Jun 11 e2 01 Jul 1 y2 Au 01 gu 1 st 20 11

August industrial output was far above expectations, but economists were unimpressed

Source: Central Statistical Office

Currency

NBP intervenes after z∏oty takes battering The Polish currency had earlier reached its lowest point against the euro in over two years In a bid to firm up the z∏oty the National Bank of Poland sold foreign currency last Friday after the Polish currency had fallen to its weakest level in nearly 27 months.

The NBP said it sold “a certain amount of foreign currencies,” while state-owned Bank Gospodarstwa Krajowego sold euros and dollars for z∏oty and purchased government bonds, Bloomberg reported, citing two unnamed traders involved in the transaction.

The z∏oty rose by as much as 2.7 percent against the euro following the news.

Earlier in the week the Polish currency’s rough ride took it to a high of z∏.4.52 against the euro.

Policymakers likely chose to strengthen the local currency to help keep the country’s debtto-GDP ratio below the 55 percent level. Once that level is breached, the government is legally required to implement tough spending cuts.

Before Friday’s actions the Finance Ministry had some €13-14 billion at its disposal for currency intervention, 10 times more than it had last year, when it intervened to shore up the z∏oty. It gives foreign currencies to either the NBP or BGK, which intervene on the market on its behalf.

Experts agreed that the main driver of the z∏oty’s

recent weakening was risk aversion – both in Europe generally and ahead of elections in Poland specifically, but Nordea Bank chief analyst Anders Svendsen said in a research note that risk aversion doesn’t fully explain the z∏oty’s most recent weakening.

Election risks are frequently mentioned as the reason for the recent z∏oty weakening, as the

polls have shown a smaller lead for the incumbent Civic Platform-led government ahead of the general elections on October 9.

Nevertheless, though Mr Svendsen said he does see a risk of an election surprise, he felt it wasn’t a justification for the hard hit the z∏oty was taking.

Andrew Kureth, Gareth Price

OPINION & ANALYSIS

SEPTEMBER 26 – OCTOBER 2, 2011

www.wbj.pl

11

PiS turns up pressure on PO

Remi Adekoya

J

ust a few weeks ago it seemed as if the ruling Civic Platform (PO) party was guaranteed a second term in office. The only questions then concerned how big the margin of victory would be and with whom PO would enter into a coalition.

Recent polls, however, indicate that the gap between PO and its closest rival, Law and Justice (PiS), is closing ahead of the October 9 election.

The dynamics of the election campaign have also changed, with PO now on the defensive and PiS gaining in strength. “For many months I have been telling my party colleagues that we are running neck-and-neck [with PiS],” Prime Minister Donald Tusk told a press conference, adding that “people could be in for a big surprise [on election day].”

Mr Tusk has since embarked on his own nationwide tour of Poland in the now-famous “Tusk bus” (see story, p. 3).

The prime minister is no doubt talking up the possibility of a PiS victory in order to mobilize those who are not his party’s core electorate but who usually vote PO because they can’t stand the thought of PiS leader Jaros∏aw Kaczyƒski taking over the reins of power.

The ruling party’s recent cam-

during the presidential campaign, namely, playing the role of the coolheaded, mature statesman. He has toned down his rhetoric and is avoiding using the incendiary language he is so often associated with.

paign has also been aimed at convincing Poles that a PO government would be able to negotiate the best deal for Poland when it comes to allocation of funds from the European Union’s 2014-2020 budget.

This argument, and the prestige (albeit symbolic) of Poland’s ongoing presidency of the EU, were supposed to be strong points for the ruling party during the campaign. But the daily dose of negative news from the euro zone has damaged the image of Europe in the minds of many Poles. It has also planted a seed of uncertainty and anxiety in many people, which plays to PiS’s advantage.

Rock-star support PiS also recently received an important image boost from three legendary Polish musicians. Punk-rock star “Kazik” said he had previously allowed himself to be “bamboozled” and had taken part in the “anti-PiS hysteria which the media helped create during the last elections in 2007.”

Meanwhile, Muniek Staszczyk, leader of the rock band T-Love, said that Mr Kaczyƒski had been “demonized” by the media in the past.

In addition, Liroy, a musician considered to be the “Godfather” of Polish rap, said recently that the PO government was “a joke.”

All this must be very worrying for the PM. Four years ago artists and young people played a big role in his party’s victory. Now, it seems the party has lost its appeal for many in these two groups.

Danger zone By joining the EU, Poland had expected to be a member of a club of stable and increasingly wealthy countries. But these days, Europe’s future doesn’t look so bright, with some even suggesting the bloc might be forced to break up. Poles are therefore not really paying attention to PO’s talk of negotiating z∏.300 billion for Poland in the next budget.

In times of uncertainty, promises going that far into the future simply don’t grab people’s attention.

Mr Kaczyƒski, meanwhile, has employed the same strategy he used

PiS has its ‘Joe the Plumber’ Remember Joe the Plumber? He was the guy who publicly engaged then

presidential-candidate Barack Obama in a conversation on the campaign trail, accusing him of having ideas that would be bad for small businesses. That gentleman quickly became the Republican party’s “averageJoe” poster boy and was invited to events on the campaign trail of Senator John McCain, Mr Obama’s main rival.

Stanis∏aw Kowalczyk, also known as “Pan Paprykarz”(Mr Pepper), has now become PiS’s own Joe the Plumber. Mr Kowalczyk, a grower of peppers, spoiled what was meant to be a routine trip for Mr Tusk in August this year. In front of the assembled media, he complained about how he and other farmers in his area had not received any help from the government after gales had ravaged the region.

“How do I live now Mr Prime Minister, how do I live?” asked Mr Kowalczyk in an emotional voice.

This now-famous scene was quickly pounced on by the opposition and Mr Kowalczyk was invited to speak at one of PiS’s campaign conventions where he proved himself to be talented at whipping up populist sentiment.

“Artists and professors are constantly being honored and given national awards. I have never heard of a farmer

The fear factor T

he debate over fiscal expansion versus consolidation continues to divide the developed world.

In response to the global recession of 2008, the UK embarked on an austerity program while the US enacted an $800 billion fiscal stimulus. Despite a softening economy, British Prime Minister David Cameron is promising to stay the austerity course. President Obama, too, is sticking to his guns with his recent proposal for an

“Fear feeds on itself, and the prediction that stocks will lose value becomes self-fulfilling” additional $450 billion of government expenditure and tax cuts to help boost employment.

Unemployment in the US has remained above 9 percent for 22 of the last 24 months. While some are supporting additional stimulus, others are calling for UK-style austerity.

But would either of these approaches

reduce unemployment most effectively, or would a new round of “quantitative easing” work better?

direction that I have been advocating for the past three years.

Accept new solutions A step in the right direction With Nobel prize-winning economists on both sides of the debate, the public is rightly confused.

The American Recovery and Reinvestment Act (ARRA) that Mr Obama passed barely three weeks after his inauguration was disappointing. An $800 billion stimulus did not have the effect for which its proponents hoped, largely because it was accompanied by a big increase in private savings. Backers of the stimulus plan now claim that things would have been much worse without ARRA. I am skeptical.

A better approach to reducing unemployment would be a new and expanded round of quantitative easing. I am heartened by calls for this in the UK, and that the talk is now turning to the purchase of risky assets, such as corporate bonds or bundles of loans to the private sector, as opposed to long-term government securities. This is a step in the right

But I would go even further. My work provides a new and coherent approach to macroeconomics that explains how a lack of confidence can lead to persistent unemployment. It supports the purchase of equities by central banks to reduce asset-price volatility, restore the value of wealth, and prevent a future market crash.

When businesspeople are afraid, they stop investing in real assets.

Lack of confidence is reflected in low and volatile asset values. The environment of fear that arises has little to do with bad government policies, although bad policy may exacerbate the situation. Businesspeople become afraid that stocks, and the values of the machines and factories that back those stocks, may fall further. Fear feeds on itself, and the prediction that stocks will lose value becomes self-fulfilling.

The 2008 recession was triggered by the collapse of a real estate bubble. Housing wealth in the US has

receiving such an award and food is a basic need, after all,” he thundered to the applause of the crowd.

“They say there are no differences between the city and the country.

Well, show me culture centers, tennis courts and [private] swimming pools in the country,” he continued. “They [city dwellers] have good salaries, what

“How do I live now Mr Prime Minister, how do I live?” are the rest of us? Cattle, beasts?”

Mr Pepper will obviously not decide this election, but he can help PiS gain rural voters, who will definitely understand the language he speaks. It is still very unlikely that PiS will emerge victorious on October 9, but not as unlikely as it was at the beginning of the campaign. If PO isn’t able to reverse the current direction of the campaign, then many Poles may well be in for a big surprise come election day, just as Donald Tusk has predicted.

Remi Adekoya is WBJ’s politics editor

Roger E.A. Farmer

fallen by 34 percent since its peak in 2006, and is still declining. The stock market fell by almost 50 percent from its 2007 peak and remains down by nearly a third. This enormous loss of wealth caused a large and persistent drop in consumption demand, which has led to an increase in unemployment. Until we are willing to explore new solutions, the misery experienced by millions of unemployed workers will continue.

The way ahead A quantitative-easing policy in which a central bank buys risky assets can prevent price fluctuations and restore the value of financial wealth. These purchases would need Treasury support, since this tactic is in effect a fiscal policy, not a monetary policy.

And, by involving the Treasury, the purchase of risky assets could be financed by issuing debt, rather than by printing more money, thereby attenuating inflationary fears.

The Great Recession did not turn into Great Depression II because of coordinated action by governments around the world. Although fiscal

expansion may have played a role in this success, central bank intervention was the most important component by far. Quantitative easing works by increasing the value of wealth. In both the US and the UK, it reduced the real expected return on long-term government bonds, which in turn nurtured a recovery in the stock market.

We need not tolerate 9 percent unemployment as the new normal.

Confidence is a self-fulfilling prophecy, and we can, and should, manage it by direct intervention in asset markets. The way ahead leads through science, not ideology, dogma, or failed theories. ● Roger E. A. Farmer is Distinguished Professor of Economics and Department Chair at UCLA. He is the author of two books on the current global economic crisis: How the Economy Works: Confidence, Crashes, and Self-Fulfilling Prophecies and Expectations, Employment, and Prices.

Copyright: Project Syndicate, 2011.project-syndicate.org

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12

COVER STORY

www.wbj.pl

SEPTEMBER 26 – OCTOBER 2, 2011

Remi Adekoya

Eastern Partnership

All eyes on the east Strengthening the ties between the EU and the countries on the bloc’s eastern periphery is proving to be a more difficult project than Poland had hoped But it now looks highly unlikely that the Polish government will be able to make that much-hoped-for announcement. Indeed, the very agreement itself, which seemed so certain this summer, now hangs in the balance.

The reason for this dramatic change in circumstances?

The arrest and detention of former Ukrainian Prime Minister Yulia Tymoshenko.

‘Release her, or else …’

Ms Tymoshenko was taken into custody in August for contempt of court during her ongoing trial. Ms Tymoshenko is charged with abuse of office when in 2009, as prime minister, she signed a natural gas imports contract – now deemed unfavorable to Ukraine – with Russia. Regardless of Ms Tymoshenko’s innocence or guilt, the manner of her arrest and detention – which smacks of political retribution – has worsened Ukraine’s already flawed image in the eyes of many European policy makers and has put its deal with the EU in

SHUTTERSTOCK

Despite mixed signals from authorities, analysts say Kiev is genuinely interested in closer ties with the European Union. But the ongoing trial of Yulia Tymoshenko has put those ambitions in jeopardy jeopardy.

Indeed, Ukrainian President Viktor Yanukovych has been warned by Europe that if the former prime minister is given a jail sentence, the coun-

EU Eastern Partnership

BY

UA MD

GE

AZ AM

COURTESY OF WIKIMEDIA COMMONS

When Poland took over the EU presidency earlier this year one of the top priorities on it’s agenda was the finalization of an EU-Ukrainian free trade agreement. This would achieve several important goals for Warsaw: it would establish Poland as the champion for eastward expansion of the EU and as the key EU ally for former Soviet states; it would draw Ukraine closer to the bloc, making it that much harder for Russia to claim it as its exclusive sphere of influence; and, finally, it was hoped the agreement would at least go some way in counteracting the EU-fatigue brought on by the sovereign debt crisis and renew the EU’s commitment towards eventual expansion.

When WBJ spoke with Polish Foreign Minister Rados∏aw Sikorski at the beginning of July, he said the EU-Ukraine negotiations were “on schedule” and that they were due to wrap up in September. The plan was to announce the successful conclusion of talks during this week’s much-touted Eastern Partnership summit.

try can forget about closer integration with the European Union. The warning came after a meeting between the Ukrainian president and a delegation of EU politicians in the Black Sea town of Yalta in midSeptember.

“I hope we brought to him very clearly the message that the rule of law is of critical importance,” Swedish Foreign Minister Carl Bildt told the press after the meeting. Mr Bildt said Mr Yanukovych had been told that European parliaments would be unlikely to ratify an agreement on closer cooperation between Ukraine and the EU if Ms Tymoshenko were sent to prison.

To outsiders it seems obvious that the arrest would be met with outrage from EU governments. So how – and why – did Ukraine get itself into this mess in the first place?

What’s the fuss about?

A number of experts say the Ukrainian government simply failed to consider the potential

consequences for its European ambitions when it decided to arrest Ms Tymoshenko.

“The Ukrainian government never expected this kind of reaction and pressure over Ms Tymoshenko’s arrest.

Nobody thought strategically about what the consequences could be. Mr Yanukovych’s recent comments show he is trying to find a way out of the situation,” said Olga ShumyloTapiola, an expert at Carnegie Europe, a think tank.

“There is talk of switching the judge [in the trial] with one who is more experienced and would find that the previous judge had made some procedural errors. The criminal code could also be changed, doing away with the law under which

the former prime minister is now being held, automatically leading to her release,” she added.

The trial has now been postponed till September 27 – two days before the Eastern Partnership summit begins – in order to give the Ukrainians time to decide on a course of action that would resolve the issue and at the same time help the government save face, according to Ms Shumylo-Tapiola.

Not mentally prepared? ¸ukasz Adamski from the Polish Institute of International Affairs (PISM), a think tank, agrees that the Ukrainian government was taken aback by Europe’s reaction.

“Nobody thought strategically about the consequences of arresting Ms Tymoshenko”

COVER STORY

SEPTEMBER 26 – OCTOBER 2, 2011

www.wbj.pl

Legal Eye

The other Eastern Partnership countries: where do they stand? best intentions, I am not sure if it will be able to succeed in its efforts [to speed up integration with the EU],” he added.

Of course, Ukraine isn’t the only member of the Eastern Partnership program. The leaders of five other countries – Armenia, Azerbaijan, Belarus, Georgia and Moldova – will also be in town this week to discuss strengthening ties with the EU.

Armenia, Azerbaijan and Belarus: a long way to go Mr Adamski said Azerbaijan is and would remain “an authoritarian country” because of its important oil and gas resources and that it was interested in Europe only as a trading and political partner. He added that Azerbaijan also needed help to neutralize increasing Russian and Chinese pressure coming its way. Armenia is making some efforts to liberalize its political system but still had a long way to go, he said.

As for Belarus, Mr Lukashenko’s blatant disregard of Western opinion has left few believing that he is really interested in closer ties with Europe.

Moldova: the favorite child Prime Minister Donald Tusk recently lavished praise on Moldova’s government, and its prime minister, Vlad Filat, for its reforms. In fact, during this year’s Economic Forum in Krynica, Mr Filat received the “Man of the Year” award from the hands of none other than the Polish prime minister himself.

“Let his determination and courage be an important signal for all those malcontents who question the essence of the European Union,” Mr Tusk said at the time.

“Moldova has become a favorite child of the Polish elite who want to see some success in the Eastern Partnership,” said PISM’s Adamski. “It has a very proEuropean government which is interested in integration with the EU, but the problem is that the government has powerful opposition from the communist party, its majority is fragile, corruption is high in the country and it is one of the poorest nations in Europe.”

“So while the government is full of the

Corrupt, too?

Transparency International's 2010 Corruption Perceptions Index (CPI) rankings, selected EU and Eastern Partnership countries (in bold) (1 = least corrupt, 178 = most corrupt)

Denmark Finland Germany Poland Georgia Moldova Armenia Belarus Azerbaijan Ukraine

1 4 15 41 68 105 123 124 134 134

Georgia: unique potential Mr Adamski pointed to Georgia as the country with the most potential.

“Georgia is quite unique, having the highest level of rule of law in the Eastern Partnership as well as the lowest level of corruption.

President [Mikheil] Saakashvili has also been successful in modernizing the country’s administration,” said Mr Adamski.

Georgia was ranked 68th (just behind

Mixed business friendliness?

World Bank's 2011 Doing Business ranking, selected EU and Eastern Partnership countries (in bold) (1 = easiest to do business, 183 = most difficult to do business)

United Kingdom Georgia Netherlands Armenia Azerbaijan Romania Belarus Poland Moldova Ukraine

4 12 30 48 54 56 68 70 90 145

Source: Transparency International

Source: World Bank

“The Ukrainians are really interested in closer integration with the EU and concluding negotiations for the free trade zone agreement. The problem is that I don’t think President Yanukovych is mentally capable of understanding what the

process of modernization and closer integration with the EU requires,” he said.

“Furthermore, I am not sure the Ukrainians in general are mentally ready either,” he added.

Ms Szumylo-Tapiola, a

Poor eastern partners GDP per capita (PPP), selected EU countries and Eastern Partnership countries (bold) 100,000 80,000 60,000

No time for despair The question remains as to whether the Eastern Partnership actually matters.

With the major players in the EU now fighting to keep the euro zone together and stave off another recession, the prospects for EU membership for the Eastern Partnership countries look bleak.

Nevertheless, the development of closer ties with Europe would benefit both sides. The EU could gain easier access to new markets, while the Eastern Partnership countries would see an injection of European investment.

The stage for closer ties has been set, thanks to a significant push from Poland.

The question now is whether both sides will rise to the occasion. ●

Ukrainian herself, said the general perception among Ukrainian experts, journalists and the country’s political class was that “the EU needs Ukraine very badly,” and that the EU’s goals were “all about getting in and grabbing what it could in the Ukrainian market.”

“Ukrainians also truly believe that the EU owes them as much as it owed Poland in the 1990s,” she said. This could explain the nonchalance with which Mr. Yanukovych’s camp initially reacted to Western protests at Ms Tymoshenko’s arrest. “The European politi-

20,000

rla nd Lux s em bou rg

the Ne

Po la

nd

$

Source: IMF

viously billed as the crowning moment of Poland’s EU presidency?

“The negotiations will not have been concluded by the end of the month. What would be a success is if the EU gave a clear political signal that it is still committed to the process of integration with countries from the Eastern Partnership,” said Rafa∏ Sadowski, an analyst at the Center for Eastern Studies (OSW).

PISM’s ¸ukasz Adamski said more prosaic examples of progress in EP-EU cooperation would be discussed, including steps taken in ongo-

“Ukrainians truly believe that the EU owes them as much as it owed Poland in the 1990s” cians worried by Tymoshenko’s arrest should be asked what a court in their country would have done if the accused threatened the judge and witnesses and showed a lack of respect for the court,” Mr Yanukovych’s Party of Regions, said in a statement in August.

Possible outcomes

40,000

Mo ldo va Ge org ia Ar me nia Uk rai ne Az erb aij an Rom ani a Be lar us

Italy) in Transparency International’s 2010 Corruption Perception Index (CPI).

The next highest scoring country from the Eastern Partnership was Moldova, which was ranked 105th out of the 178 countries in the index. Belarus, meanwhile, was placed 127th and Ukraine 134th. Poland ranked 41st.

But despite Georgia’s successes, it still has unresolved territorial disputes with two breakaway regions – Abkhazia and South Ossetia – with strong separatist movements and is geographically remote from the EU.

The consensus amongst all of the experts that spoke with WBJ is that a succesful conclusion of the free-trade agreement negotiations will not be achieved during this week’s meeting in Warsaw.

But if not that, then what can it achieve at the summit, pre-

ing technical assistance programs, border-management cooperation and energy ties.

“I also expect an announcement that the freetrade agreement negotiations have been practically concluded but that the official signing of the document will be postponed until the EU-Ukraine summit in December,” he added. That would mean there is still a chance for Poland to achieve one of its main objectives during its term at the helm of the EU. With all eyes on the eurozone debt crisis during the first half of Poland’s presidency, this would be a welcome achievement.●

13

The Eastern Partnership Paul Fogo is a senior attorney with Miller, Canfield, W. Babicki, A. Chelchowski & Partners. fogo@pl.millercanfield.com “The time is ripe to open a new chapter in relations with our Eastern neighbors.”

Dr Benita FerreroWaldner, EU Commissioner External Relations and European Neighbourhood Policy.

This week Poland will host a meeting of government ministers from the Eastern Partnership and EU. Launched in the Spring of 2009, the Eastern Partnership is tasked with facilitating closer ties between the EU and its neighbors to the east, including Armenia, Azerbaijan, Belarus, Georgia, Moldova and Ukraine.

Poland is recognized as the driving force behind creation of the Eastern Partnership, representing Poland’s first major political initiative to be embraced by the EU.

Goals The Eastern Partnership builds upon the EU’s more general Neighbourhood Policy, which encourages increased cooperation between the EU and its immediate neighbors. The Eastern Partnership will focus on the creation free-trade pacts, energy security, elimination of travel restrictions and overall regional development. Of particular importance to the EU is assisting each of the six member countries to improve their respective borders further to the east. The EU Commission has committed nearly €600 million to the Eastern Partnership through 2013. Poland, as both the author of the Eastern Partnership and current holder of the revolving EU presidency, is taking the lead roll in spearheading increased cooperation with its eastern neigbhors. The summit this week will examine the next steps necessary to further implement the goals of the Eastern Partnership.

EU membership?

Membership in the Eastern Partnership, however, does not necessarily represent a first step toward full EU membership. While the Polish government openly embraces such a possibility, other EU member countries, including Germany and France, are at best lukewarm to the idea – at least for the near future. A more likely outcome following the implementation of

needed reforms in each country would be the signing of individual Association Agreements with each country once it achieves agreed milestones.

Ukraine, while joining the Eastern Partnership, has been keen to point out that EP membership should not be treated as a substitute for full EU membership. While Georgia and Armenia are members of the Eastern Partnership, Turkey is not. The EU has already opened direct accession talks with Turkey, and therefore membership in the Eastern Partnership would be viewed as a step in the wrong direction.

History The Eastern Partnership, at least with respect to Ukraine, has its roots in the now defunct EU-Ukraine Action Plan signed in 2005 following the “Orange Revolution,” a treaty designed to kick-start the goals of the Partnership and Cooperation Agreement signed earlier between the EU and Ukraine. Poland, a long-time proponent of Ukrainian membership in the EU, actively embraced the Action Plan. In the end, however, Ukraine abandoned the Action Plan, disappointed in part on the lack of support from the EU in its stand-off with Russia over the supply of natural gas in 2008 and 2009.

The Eastern Partnership, in contrast, commits EU funding to Ukraine and the other five member countries to implement real projects and reform, including the construction and modernization of gas and oil pipelines, as well as to connect regional electricity grids.

Summit in Poland The two-day Eastern Partnership Summit will be held in Poland on September 29 and 30. The participants are expected to discuss the initiatives taken to date, as well as to agree on the next steps needed to realize specific reforms.

The six member countries will be looking for specific pledges for assistance from the EU to realize particular reforms and projects, while the EU will be looking for signs of progress in the areas of human rights, the rule of law and political reform. ●

14

www.wbj.pl

INVESTING IN POLAND 2012 CONFERENCE

SEPTEMBER 26 – OCTOBER 2, 2011

FDI

Poland still ‘sexy’ for investors

PIOTR GAMDZYK/WBJ

PIOTR GAMDZYK/WBJ

Despite the gloomy economic mood, investment is flowing into Poland in traditional sectors like manufacturing as well as in emerging ones such as shale gas

Jolanta Jaworska, IBM Polska

L-R: Pawe∏ Paw∏owski, City of Warsaw; Adam ˚o∏nowski, PwC; Andrew Kureth, WBJ; Marcin Przy∏´bski, Poznaƒ City Hall; Agnieszka Sobieszek, ¸SSE S∏awomir Majman, president of the Polish Investment and Information Agency (PAIiIZ), which co-organized the conference, said 2011 could see a 10 to 20 percent increase in FDI compared to 2010. As of September, PAIiIZ had 170 investment projects valued at €6.2 billion, a portfolio 40 percent larger than during the same period of last year, he added.

PIOTR GAMDZYK/WBJ

Although the global financial crisis has had a negative effect on the value of foreign direct investment (FDI) to Poland, the country has remained “sexy” for investors, according to panelists at a conference marking the launch of Investing in Poland 2012, Warsaw Business Journal’s annual guide to Poland’s investment climate and business environment.

Adam ˚o∏nowski, PwC

Challenges and successes But several participants, including Adam ˚o∏nowski, a director at PwC in Poland, voiced fears that the crisis might lead to Poland gaining a greater share of lower-capital, service-oriented investment projects. He said his company was seeing an “alarming trend” of more service-oriented projects, which lead to

smaller injections of funding into Poland. The service sector is also not immune to competition from eastern neighbors like Ukraine or even giants like India, where labor costs are lower.

One answer to this challenge, said panelists, is to put emphasis on training to make quality rather than price the major asset of Poland’s labor force. A good sign this mes-

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INVESTING IN POLAND 2012 CONFERENCE infrastructure investments were also in the spotlight.

Rados∏aw St´pieƒ, undersecretary of state in the Ministry of Infrastructure, was keen to stress that demand for new infrastructure would continue long after 2012, although negotiating continued generous EU funding for Polish roads, railways and airports might be challenging given the current economic situation in Europe.

www.wbj.pl

15

PIOTR GAMDZYK/WBJ

SEPTEMBER 26 – OCTOBER 2, 2011

S∏awomir Majman, PAIiIZ

has over 5,000 employees.

Poland is also successfully capitalizing on traditional FDI sectors such as manufacturing.

Indeed, in September the Financial Times’ fDi Intelligence put Poland in third position globally – behind the US

and China – as the best location for projects in the production sector. “I think we have a good chance of becoming a manufacturing base for the EU,” Mr Majman said.

With the Euro 2012 soccer championships getting closer,

PIOTR GAMDZYK/WBJ

sage is getting through is that Polish universities are increasingly open to adapting their curricula to the needs of industries, said Jolanta Jaworska, governmental programs director for Central & Eastern Europe at IBM Polska, which

Alice Trudelle

PIOTR GAMDZYK/WBJ

Adam Czy˝ewski, PKN Orlen

PIOTR GAMDZYK/WBJ

Rados∏aw St´pieƒ, Ministry of Infrastructure

Interesting projects involving lower capital and higher risk are also emerging in sectors such as clean technology, biotechnology, advanced solutions for the health sector and even the film industry, said Albin Paw∏owski, investment director at investment fund Blumerang Investors.

But the real star among new investments is, of course, shale gas. Poland might be sitting on reserves that could guarantee independence from Russian natural gas and even turn the country into a net exporter. But finding out whether this is more than just a pipe dream involves heavy investment, and Polish companies are teaming up with international oil and gas giants to mitigate the risk.

“It costs between $10-20 million for every drilling,” said Adam Czy˝ewski, PKN Orlen’s chief economist. Mr Czy˝ewski declined to give details on an agreement between his firm and Canadian Encana regarding exploitation of shale gas in the US and in Poland, but said “we cannot wait for gas to show up in Poland, we have to invest.”

“We are convinced that we will have plenty of gas in Poland. Orlen is taking this risk consciously.”

Albin Paw∏owski, Blumerang Investors

PIOTR GAMDZYK/WBJ

PIOTR GAMDZYK/WBJ

New possibilities

Jacek B∏oƒski, Lewiatan Business Angels

Participants were treated to an in-depth discussion on FDI into Poland

Conference Partner

Warsaw Business Journal would like to thank its partners for the

Investing in Poland 2012 conference

Agricultural Property Agency ANR (Agricultural Property Agency) is a Polish governmental institution responsible for privatizing public agricultural and non-agricultural land. ANR offers the biggest packet of investment land in Poland (100,000 hectares).

Over 60,000 hectares are situated in cities that have direct access to or are very near to transportation hubs and are purposed mostly for industry, trade, service facilities, logistics and residential construction. ANR also offers plots ripe for the development of hotels and spas, recreation and tourism, including golf-

course developments. ANR has many properties registered as historical monuments, such as palaces and manor houses that could be converted into accommodation or luxury residences.

Many of ANR’s properties are situated in Special Economic Zones. These plots can be designated as greenfield investment, technology and industrial parks, as well as logistics, commercial and business centers. On the land purchased from ANR many international concerns have set up their investment projects, among them such lead-

ing companies as Opel, Toyota, Isuzu, Sharp, LG, Michelin, Electrolux, IKEA, Auchan, Jerónimo Martins, McDonald’s, Pittsburgh Glass Works, Viessmann and Cersanit.

Poland is in the lead of the most attractive countries for foreign investors and the Polish economy has been characterized by the highest growth rate as compared to other economies of the EU member states. Thus, it is worth emphasizing that the largest amount of attractive investment land in the country is offered by the ANR. ●

Echo Investment has sold its Park Post´pu office project in Warsaw for €102 million

J.W. Construction has laid the cornerstone for its first commercial project in Szczecin

17

18

LOKALE IMMOBILIA

W a r s a w B u s i n e s s J o u r n a l ’s w e e k ly s u p p l e m e n t o n re a l e s t a t e , c o n s t r u c t i o n a n d d e v e l o p m e n t

•

SEP 26 – OCT 2, 2011, LI 16/38

Imtech Polska in Eurocentrum Engineering company Imtech Polska has leased more than 7,000 sqm of space in Grupa Capital Park’s planned Eurocentrum Office Complex project in Warsaw. Following the transaction, which was brokered by Cushman & Wakefield, the tenant will occupy the top five floors in the Gamma building in the complex.

Victoria Business Center construction Dublin-based real estate investor MONTI is turning the former Victoria Center building in Poznaƒ into a modern class-A office facility. Located on the city’s ul. Strzelecka and renamed Victoria Business Center, the project will offer 4,800 sqm of leasable space on three floors, as well as an underground parking lot for 93 cars. The z∏.13 million scheme was designed by the Studio MTS architectural firm and a consortium of PTB Nickel and Mercury Engineering Polska is the general contractor of the development. ●

In this issue LHI’s Chmielna 25 . . . . . . . . . . . .16 Skanska to launch Atrium 1 . .16 Park Postępu sale . . . . . . . . . . .17 Warsaw’s Hotel Bristol sold . .17 New Warsaw airport hotel . . .17 Hanza Tower in Szczecin . . . . .18 Wzgórze mall financing . . . . . .18 Property-related stocks . . . . . .18

LHI to launch Chmielna 25 project in Warsaw The development is part of the company’s strategy of focusing on revitalization schemes in the city’s historic center Real estate company LHI will soon launch construction on its Chmielna 25 office and retail project in downtown Warsaw. The firm has already secured a building permit for the development and is now in the process of selecting its general contractor. Construction is expected to take approximately 18 months and finish in the second quarter of 2013.

The Chmielna 25 scheme, which will be located on a 1,242-sqm plot on Warsaw’s ul.

Chmielna high street and is meant to contribute to the revitalization of the historic neighborhood, will offer approximately 5,700 sqm of GLA. This will include more than 3,800 sqm and almost 1,800 sqm of office and retailservice space, respectively.

The Chmielna 25 investment has been designed by the Bulanda, Mucha - Architekci

COURTESY OF CISZEWSKI FINANCIAL COMMUNICATIONS

COURTESY OF GRUPA CAPITAL PARK

Commercial properties

Chmielna 25 will offer approximately 5,700 sqm of GLA in downtown Warsaw studio and will feature two retail-service and six office floors, as well as an underground parking area for 25 cars. The investor is applying for the LEED Gold energy and environmental performance certificate for the development.

Central interest LHI, which has until recently

been mostly known for its property leasing activity, is now increasingly turning its attention to real estate project financing with Chmielna 25 being the company’s second investment in central Warsaw in recent years, after the Nowy Dom Jab∏kowskich project, which officially opened for business last week.

More schemes of this kind are on LHI’s mind. “We are only interested in revitalization projects located in downtown historic Warsaw, in the best locations. The maximum size of those projects is 10,000 sqm of GLA,” said Robert Mand˝unowski, CEO and member of the company’s management board.

During the Nowy Dom Jab∏kowskich project LHI cooperated with the heirs of the plot located at the intersection of Warsaw’s ul.

Chmielna and ul. Bracka on which the scheme is sited. Mr Mand˝unowski added that LHI is interested in joint investments with the heirs of other well-located properties in the Polish capital.

“We are not building a land bank,” Mr Mand˝unowski said, stressing that LHI only buys real estate which has a building permit for specific projects that have earlier been agreed upon with his company. “We are currently in talks concerning further investments,” Mr Mand˝unowski admitted.

According to Mr Mand˝unowski, there is now considerable demand in Warsaw for office space in small prestigious facilities located in the city’s historic neighborhoods.

“The small number of such projects in Warsaw results from the fact that there are few available plots which could lend themselves to such investments,” he said.

Adam Zdrodowski

Office

Skanska’s Atrium 1 project launch scheduled for Q4 The company wants the Warsaw development to be the first “deep green” investment in Poland Skanska Property Poland will launch construction on its Atrium 1 office project in Warsaw by the end of this year. Located on the capital’s Al. Jana Paw∏a II, near Rondo ONZ, the scheme will be the latest addition to a complex of commercial buildings that the company has been developing along the avenue since the 1990s.

The 18,000 sqm Atrium 1 development is now waiting for a building permit; construction is expected to start in December and finish two years later. Skanska, which was a pioneer in sustainable development in the Polish market, wants the project to set new building standards in the country as far as energy and environmental performance is concerned.

“This will be the most ecological office building in Poland,” said Katarzyna Zawodna, a regional director at Skanska Property Poland.

She added that Atrium 1 will

feature “deep green” solutions, meaning the project will be even more energy efficient than other ecological performance certified properties.

Among the solutions employed in the investment will be the use of solar and geothermal energy, as well as zero consumption of potable water for non-drinking purposes. There are already buildings in the world which produce more energy than they consume, and this is the direction in which Skanska Property Poland wants to go, Ms Zawodna said.

The company has not

secured any tenants for the Atrium 1 project yet but it believes that commercialization should not be a problem.

Construction has recently launched in the neighborhood on a station of the capital’s second subway line, which should further boost its attractiveness as a business location.

According to Ms Zawodna, Warsaw’s Wola district will be one of the hottest office spots in the Polish capital in the near future and is an area in which her own company will also remain active. Apart from the Green

Corner investment on ul.

Ch∏odna, which is currently under construction, and the soon-to-be-started Atrium 1 development, Skanska is planning the Atrium 2 scheme, which will be built on land adjacent to Atrium 1 and is expected to be launched in the first half of 2013. And more is yet to come. “We would like to consider an opportunity to build a skyscraper near Rondo ONZ in Warsaw but this is now in the dreaming rather than planning phase,” Ms Zawodna said.

Adam Zdrodowski

Warsaw Business Journal presents Real Estate weekly newsletter • Know about the newest projects before they’re on the market • Keep up to date on the latest tenders and auctions • Learn the latest trends in Poland’s dynamic office, residential and retail sectors • Find out who’s who in Polish real estate To subscribe: e-mail subscribe@wbj.pl or call +48 22 639 85 68, ext. 201 and sign up for free two-week no-obligation trial subscription

LOKALE IMMOBILIA – REAL ESTATE

SEP 26 – OCT 2, 2011

www.wbj.pl

17

Office

The development was sold due to concerns over funding for the firm’s future projects

of the structures has seven above-ground floors and two underground floors. The whole complex offers 33,826 sqm of office space, with a two-storey underground parking lot and a ground-level parking lot providing a total of over 800 parking spaces.

Mr Gromniak said the funds acquired from the sale would now be allocated to securing sources of financing for new projects.

Manfred Wiltschnigg, a member of the management board of Immofinanz Group, said his company was pleased with the transaction. “The purchase is a great success for us.

There was a lot of interest in Park Post´pu from national and international investors,” he said

Developer Echo Investment has sold its Park Post´pu office development to Austrian investor and developer Immofinanz Group for €102 million.

“Echo Investment is selling the facility because it needs to maintain its financial liquidity and due to its fears concerning difficulties in obtaining funds for its next projects,” Piotr Gromniak, president of Echo Investment’s management board, said in a statement.

The development, a modern office complex located in Warsaw’s Mokotów district, consists of four class-A buildings. Each

in a statement.

“The decisive factor was our long-term experience and the fact that we had smoothly carried out transactions of this type in the past,” he added.

Echo Investment has also finalized a credit agreement for €18 million with PKO Bank Polski to help build Outlet Park Szczecin, the first outlet mall in the Zachodnio-Pomorskie voivodship.

The facility will be located on the site of a pre-existing mall, also owned by Echo Investment, on ul. Struga in Szczecin’s Prawobrze˝e neighborhood. Work on this phase is expected to be completed in the first half of 2012, while work on the second phase will begin a David Ingham year later.

COURTESY OF ECHO INVESTMENT

Echo Investment sells Park Post´pu for €102 million

Park Post´pu offers 33,286 sqm of office space in Warsaw’s Mokotów district

Hotel ownership

Work on new airport hotel set to begin

Orbis offloads Warsaw’s Hotel Bristol for €19.5 million

The new hotel is scheduled to open in 2013 COURTESY OF WIKIMEDIA COMMONS

The Orbis Hotel Group has sold the iconic five-star Hotel Bristol in Warsaw and the title to perpetual usufruct of the land for €19.5 million to Rosmarinum Investments, an investment company with capital ties to the current lessee of the property, Royal Starman Bristol.

“Orbis obtained a satisfactory price and released funds locked in a non-core real property,” Laurent Picheral, president of the board at Orbis, said in a statement.

The company will use the money to help fund development projects and pay for a major re-branding project. The group is carrying out a rebranding of its 18 Etap and Ibis brand hotels in Poland as part of a strategy set out by its strategic partner, Accor. Un-

COURTESY OF JEMS ARCHITEKCI

The proceeds of the sale will be put towards a major re-branding project

The Bristol was sold to British investment fund Rosmarinum Investments der the changes, Ibis will become a “Mega Brand” comprising three other brands: Ibis, which remains Ibis, “Ibis Styles,” formerly All Seasons, and “Ibis Budget,” which was Etap Hotel.

“Accor is launching a large-

scale project to strengthen the group’s leading position in the world. … We will offer our customers [modern solutions] that will meet the growing and changing expectations of the market,” Mr Picheral said.

Orbis is now building four

new budget hotels in Poland, each of which could be operational by 2012.

The group, which describes itself as the largest hotel network in Poland, manages nearly 60 hotels with 10,500 rooms.

Gareth Price

Austrian construction firm Alpine has signed a z∏.141 million contract to build a new fivestar hotel at Warsaw’s Chopin Airport. Work on the development is due to begin on September 28 with the project expected to be completed within 20 months. The building is scheduled to open in mid-2013.

The development, which will comprise 16,700 sqm of usable space, will be built on the existing airport parking space in the immediate vicinity of the airport’s Terminal 2. It will pro-

vide 225 hotel rooms, a restaurant, bar, swimming pool and fitness center, five conference rooms and a multi-storey car park.

The building, which was designed by JEMS Architekci, will be a dark-graphite threestorey structure and when viewed from a bird’s-eye perspective will resemble the shape of a small piano.

The facility will be a Renaissance Hotel, a brand owned by Marriott International.

David Ingham

LOKALE IMMOBILIA – REAL ESTATE

www.wbj.pl

Siódemka for City Point Valad, the manager of the City Point logistics project in Warsaw, has signed a lease agreement with courier group Siódemka, according to which the latter company increased the amount of space it occupies at the property from 5,123 sqm to 6,644 sqm, and renewed its existing lease for a further three years.

“Siódemka’s decision to take more space and renew its lease confirms the strong fundamentals of the City Point asset,” said Harry Bunbury, Valad’s country manager for Poland.

PPP hospital in ˚ywiec Toronto-based healthcare management firm InterHealth Canada and ˚ywiec County have signed a z∏.200 million contract to build a new hospital on ul. Pola Lisickie in the city of ˚ywiec, located in the Silesian voivodship.

The public-private partnership will be financed by InterHealth Canada. ●

SEP 26 – OCT 2, 2011

JWC lays cornerstone for Hanza Tower Warsaw Stock Exchange-listed developer J.W. Construction Holding last week laid the cornerstone at the construction site of its Hanza Tower office project in Szczecin, Zachodniopomorskie voivodship. The 25-storey development marks the company’s first investment in the commercial property market in the city.

According to Tomasz Panaba˝ys, vice president of J.W. Construction Holding’s management board, Szczecin is now seeing increased economic activity, which is accompanied by growing demand for class-A office space featuring well-developed conference and parking infrastructure.

“The development of Hanza Tower meets the needs of investors, whose number in

Szczecin is growing. Our investment is blazing a trail for other large projects in the city.

Research which we have carried out shows that Szczecin is today more or less where Wroc∏aw and Poznaƒ were 10 years ago, which means the city has great prospects,” Mr Panaba˝ys said in a statement.

The Hanza Tower project, whose commercialization is already underway, will offer approximately 34,000 sqm of usable space. Apart from office area, the development will comprise retail space housing stores of prestigious brands which have until now been absent from the Szczecin market, several conference rooms, as well as an underground parking lot for almost 400 cars.

Adam Zdrodowski

COURTESY OF MARTIS CONSULTING

18

Hanza Tower is J.W. Construction’s first office project in Szczecin

Wzgórze Shopping Centre gets €136.8 million loan Developer Mayland Real Estate has received a €136.8 million senior financing loan which it will use to redevelop and extend the Wzgórze Shopping Centre project in Gdynia.

Construction work will start within the next few weeks, with opening scheduled for the third quarter of 2013.

Polish lenders Bank Pekao and Bank Zachodni WBK will provide the financing, with the former acting as agent and majority lender. The debt was arranged by Colliers International.

“This transaction confirms our strategy of providing flexible construction finance to

experienced and competent developers,” Monika Mielecka, director of commercial real estate finance at Bank Pekao, said in a statement.

Mayland is redeveloping the facility with the aim of making it the “number-one” shopping and leisure destination in Tricity – the conurbation compris-

ing Gdynia, Gdaƒsk and Sopot.

The redeveloped mall will occupy 70,000 sqm of GLA and comprise 270 units. The anchor tenants will include Real, Inditex Group, Al Shaya Group, C&A and Helios. The center is currently 70 percent leased out.

Mayland Real Estate has been present in the Polish mar-

ket since 2006. In 2008, the company opened three shopping centers in the country: Karolinka in Opole, Pogoria in Dàbrowa Górnicza and Jantar in S∏upsk. In the near future, the developer plans to build seven more projects with a total of approximately 300,000 Gareth Price sqm of GLA.

Property-related stocks

DAILY EXECUTIVE DIGEST Poland A.M. gives you the biggest Polish stories of the day.

Have the most valuable news delivered to your inbox each weekday morning.

S i g n u p f o r a 2 - w e e k f r e e - t r i a l ! w w w. p o l a n d a m . p l G e r m a n v e r s i o n : w w w. p o l e n a m m o r g e n . p l

Security

Closing price on Sep 22

% change (week)

52-week low

52-week high

% change (year)

Total shares

Market value (z∏. mln)

BUDIMEX

69.00

-0.72

64.00

109.20

-22.73

25,530,098

1,761.58

CELTIC

19.05

-3.54

15.55

60.55

N/A

34,068,252

649.00

DOMDEV

25.65

-1.35

25.65

50.80

-45.07

24,560,222

629.97

ECHO

3.55

4.11

3.24

5.55

-30.80

420,000,000

1,491.00

ELBUDOWA

98.00

-4.85

98.00

186.70

-47.98

4,747,608

465.27

ENERGOPLD

2.71

-8.45

2.71

4.10

-28.68

70,972,001

192.33

ERBUD

21.48

-7.81

14.70

61.00

-59.47

12,602,711

270.71

GANT

8.00

-3.38

7.98

20.44

-60.00

20,499,953

164.00

GTC

9.90

1.54

9.33

24.98

-56.48

219,372,990

2,171.79

HBPOLSKA

0.86

-7.53

0.86

3.57

-75.77

210,558,445

181.08

JWCONSTR

6.91

-1.99

6.91

18.35

-59.35

54,073,280

373.65

LCCORP

0.98

3.16

0.85

1.69

-38.75

447,558,311

438.61

MARVIPOL

8.43

-1.75

7.22

12.81

-23.29

36,923,400

311.26

MIRBUD

2.30

-6.12

2.25

4.75

-44.31

75,000,000

172.50

MOSTALWAR

21.10

-0.71

19.70

69.00

-67.03

20,000,000

422.00

MOSTALZAB

1.29

-3.01

1.28

3.60

-64.07

149,130,538

192.38

ORCOGROUP

19.79

-10.86

19.79

40.00

-30.85

14,053,866

278.13

PBG

62.50

-4.58

62.50

252.00

-73.96

14,295,000

893.44

PLAZACNTR

1.99

-24.05

1.99

5.39

-61.73

296,738,962

590.51

POLAQUA

9.78

-4.59

9.78

20.60

-44.59

27,500,100

268.95

POLIMEXMS

1.39

0.72

1.30

4.40

-68.19

521,154,076

724.40

POLNORD

12.10

-2.89

11.99

38.70

-67.85

23,798,439

287.96

RANKPROGR

10.15

-3.33

9.49

13.60

1.00

37,145,050

377.02

ROBYG

1.14

0.00

1.11

2.13

N/A

257,390,000

293.42

RONSON

1.00

1.01

0.94

1.70

-38.65

272,360,000

272.36

TRAKCJA

1.50

-2.60

1.44

4.97

-66.81

232,105,480

348.16

ULMA

59.50

0.51

57.00

88.00

-21.50

5,255,632

312.71

UNIBEP

5.00

5.26

4.47

10.30

-42.40

33,927,184

169.64

WARIMPEX

5.30

-5.19

5.30

10.89

-41.11

54,000,000

286.20

ZUE

9.14

-0.65

7.90

15.14

N/A

22,000,000

201.08

20

MARKETS

www.wbj.pl

SEPTEMBER 26 – OCTOBER 2, 2011

Stocks report

world stock indices DJIA

NASDAQ

10,733.83 (Sep 22 close)

S&P500

2,455.67 (Sep 22 close)

-6.12% (for the week)

FTSE100

1,129.56 (Sep 22 close)

-5.81% (for the week)

DAX

5,041.60 (Sep 22 close)

-6.58% (for the week)

-5.54% (for the week)

Stocks hammered

NIKKEI225 5,164.21 (Sep 22 close)

8,560.26 (Sep 22 close)

-3.30% (for the week)

-1.25% (for the week)

CHANGE: -1.25%

CHANGE: -2.60%

CHANGE: -3.86%

CHANGE: -9.53%

CHANGE: -23.42%

CHANGE: -16.26%

(year to Sep 22)

(year to Sep 22)

(year to Sep 22)

(year to Sep 22)

(year to Sep 22)

(year to Sep 22)

52-week high: 12,928.50

52-week high: 2,887.75

52-week high: 1,370.58

52-week high: 6,105.80

52-week high: 7,600.41

52-week high: 10,891.60

52-week low: 10,572.20

52-week low: 2,316.11

52-week low: 1,101.15

52-week low: 4,791.00

52-week low: 4,965.80

52-week low: 8,227.63

Andrew Nawrocki, Market analyst & trader, gowebtrade.com One week after world stocks posted their biggest weekly gains since early July (as measured by the MSCI world equity index,) stocks once again plummeted. On Thursday, September 22, investors witnessed a global nose-dive on the markets, largely as a result of mounting poor macroeconomic data and a continued lack of political leadership. This has led to, as announced last week by the IMF in its Global Financial Stability Report, a full-blown “crisis of confidence.”

The week began on a sour note, with the WIG shedding 1.31 percent on Monday, while the WIG20 fell 1.51 percent. On Tuesday and Wednesday, both indices closed with marginal gains, outperforming most of Europe’s leading indices.

Major indices WIG

36,851.20 (September 22 close)

WIG20

2,122.55 (September 22 close)

Top 5 IZNS EKO INTERSPPL TRANSPOL CIECH

Closing 1.10 4.40 1.75 6.10 13.14

Bottom 5 Closing PRAGMAFA 13.10 BEST 9.40 PLAZACENTER 1.99 EFEKT 9.49 ATMGRUPA 1.01

22.09

21.09

20.09

19.09

16.09

15.09

14.09

13.09

12.09

09.09

08.09

07.09

06.09

22.09

21.09

20.09

19.09

16.09

15.09

14.09

13.09

12.09

09.09

2,100

08.09

36,000

07.09

2,180

06.09

37,400

05.09

2,260

02.09

2,340

38,800

01.09

40,200

31.08

2,420

30.08

41,600

29.08

2,500

26.08

43,000

05.09

52-week low: 2,122.55

02.09

Change year to September 22: -17.09%

01.09

52-week low: 36,851.20

31.08

52-week high: 2,932.62

Change year to September 22: -18.27%

30.08

Change for the week: -7.07%

29.08

52-week high: 50,371.74

26.08

Change for the week: -5.38%

% change (week) 52-week high 34.15 3.64 19.57 8.23 16.67 6.00 16.41 28.46 15.36 33.00

52-week low 0.82 3.30 1.48 11.75 10.83

Top 5 PGNIG BRE GTC POLIMEXMS BZWBK

Closing 4.05 217.00 9.90 1.39 220.00

% change (week) 3.58 2.70 1.54 0.72 0.46

52-week high 4.64 349.00 24.98 4.40 239.00

52-week low 3.45 207.70 9.33 1.30 210.00

% change (week) -27.82 -24.80 -24.05 -20.72 -19.20

52-week low 12.60 4.60 1.99 9.29 1.01

Bottom 5 KGHM PKNORLEN PGE PEKAO TAURONPE

Closing 139.5 33.51 17.40 124.00 4.85

% change (week) -15.96 -10.74 -9.38 -8.89 -6.55

52-week high 198.40 57.90 24.90 196.50 6.89

52-week low 113.80 33.51 17.40 123.40 4.85

52-week high 24.00 12.96 5.39 16.70 3.53

Currency report

Stick and twist?

Other indices sWIG80

8,487.06 (September 22 close)

WIG-Banki

4,995.74 (September 22 close)

22.09

21.09

20.09

19.09

16.09

15.09

14.09

13.09

12.09

09.09

08.09

07.09

26.08

22.09

21.09

20.09

19.09

16.09

15.09

14.09

13.09

12.09

09.09

4,900

08.09

42.0

07.09

5,140

06.09

42.8

05.09

5,380

02.09

43.6

01.09

5,620

31.08

44.4

30.08

5,860

29.08

45.2

26.08

6,100

06.09

52-week low: 4,944.19

05.09

Change year to September 22: -24.23%

02.09

52-week low: 42.76

01.09

52-week high: 7,387.49

Change year to September 22: -31.67%

31.08

Change for the week: -5.29%

30.08

52-week high: 64.39

29.08

Change for the week: -0.74%

46.0

Adam Narczewski, X-Trade Brokers Dom Maklerski SA

22.09

21.09

20.09

19.09

16.09

15.09

14.09

13.09

52-week low: 8,487.06

12.09

07.09

06.09

05.09

02.09

22.09

21.09

20.09

19.09

16.09

15.09

14.09

43.01 (September 22 close)

52-week high: 12,932.00

SOURCE: WSE

NewConnect

13.09

12.09

8,200

09.09

2,000

08.09

8,500

07.09

2,100

06.09

8,800

05.09

2,200

02.09

9,100

01.09

2,300

31.08

9,400

30.08

2,400

29.08

9,700

26.08

2,500

01.09

Change year to September 22: -29.30%

31.08

52-week low: 2,086.64

30.08

Change year to September 22: -24.06%

29.08

Change for the week: -2.00%

26.08

52-week high: 2,987.72

09.09

2,103.44 (September 22 close)

08.09

mWIG40 Change for the week: -1.35%

Late on Wednesday though, as a two-day Federal Reserve meeting came to a close in the US, the Fed announced its long expected “Operation Twist.” By selling some $400 billion in short-term government bonds and using the proceeds to buy long-term bonds, the Fed is hoping to further lower long-term interest rates. This move was met with a massive thumbs down by markets.

Markets plunged on Thursday, especially after dismal data from China and Germany crystallized investor fears. The WIG plummeted 6.05 percent, while the WIG20 fell 7.27 percent.

Hard-hit over the course of the week were oil & mining stocks, with PKN Orlen losing over 10.5 percent, while KGHM shed close to 16 percent. ●

A statement from the US Federal Reserve last Wednesday brought the news investors were expecting: The US central bank will begin “Operation Twist” by exchanging short-term notes (with maturity of up to three years) for long-term bonds.

The Fed hopes that the program will adjust longterm yields downward, thus boosting the US economy.

However, the Fed cannot in reality do much to turn the economy around and even the Federal Open Market Committee finally admitted that there are “significant downside risks” to the scenario of a slow recovery.

As most investors were hoping for another round of quantitative easing, the Fed’s decision caused a sharp decline of equities and a quick flow of capital

to the US dollar as risk aversion increased dramatically.

It seemed the EUR/USD was recovering from the previous week (reaching $1.38) but after Wednesday it collapsed below $1.34, its lowest level since January of this year.

The z∏oty market was dominated by speculators.

The local currency, despite many investment banks’ positive outlook for the Polish economy, depreciated dramatically. The EUR/PLN continued to advance to reach z∏.4.53 (the highest level since June 2009). The NBP, along with the BGK (Bank Gospodarki Krajowej) intervened on Friday, causing the z∏oty to appreciate. The EUR/PLN declined to z∏.4.42, the USD/PLN to z∏.3.27 and the CHF/PLN to z∏.3.60. ●

currency rates 4.3497

4.2056 21.09

23.09

4.1890 20.09

SOURCE: NBP

4.1482 19.09

22.09

4.1058 16.09

0.1030

0.1036 23.09

4

4.3119

PLN-100JPY

5

22.09

0.1021 21.09

0.1019 20.09

19.09

0.1032 16.09

3.6191

3.6745 23.09

0.10

0.1031

PLN-RUB

0.12

22.09

3.5944 21.09

3.6323 20.09

3.6076

3.6017 3.5

16.09

5.1244 23.09

5.0854 22.09

5.0252 21.09

5.0282 20.09

4.9705

5.0142 19.09

4

16.09

3.3171 23.09

3.2917 22.09

5

PLN-CHF

4.0

19.09

PLN-GBP

6

3.2123 21.09

3.2067 20.09

19.09

3.1506 16.09

4.4510

4.4900 23.09

3.0

3.1867

PLN-USD

3.5

22.09

4.3925 21.09

4.3811 20.09

19.09

4.3462 16.09

4

4.3513

PLN-EUR

5

THE LIST

SEPTEMBER 26 – OCTOBER 2, 2011

www.wbj.pl

21

Business Guide

Business Organizations Listed alphabetically

Company name Address Tel./Fax E-mail Web page

Number of member companies

Registration fee (z∏.)

Market sectors

Services

Year founded

President of the organization

11,000 + VAT

None

Construction; IT and telecom; food; metal and machine industry; financial intermediary

Providing economic law information (Polish and EU); promotion and advertising; spokesperson in crisis situations; advice and consulting on economic law, tax, management training, 2007-2013 EU funds, legal transformation of companies, cost reduction, recruitment and selection, restructuring; representing companies’ interests; partner and contractor acquisition intermediation; posting and dissemination of information and companies’ offers

1991

Marek Goliszewski

Over 7,000

Negotiable

The amount of monthy membership fee

Banks; construction; chemicals; advisory; education; power engineering; pharmaceuticals; finance; mining industry; steel mills; IT; infrastructure; media; motor industry; clothing; mail; law; health services; shipyards; telecom; transport; tobacco; insurance; gas; gastronomy; printing; consulting; property development; fuel industry

Looking after members’ rights and interests; social relations management; support for Polish employers and enterpreneurs acquiring EU funds; economic consultancy; legislative applications; market research; legal advisory; organization and support of employer education; Polish representation in ILO

1989

Andrzej Malinowski

Foreign Investors Chamber of Industry and Commerce in Poland ul. Paƒska 73, 00-834 Warsaw 22 314-7575/22 314-7576 biuro@iphiz.com.plwww.iphiz.com.pl

WND

2,800

1,000

All market sectors

Legal; financial and organization consultancy; member representation before state authorities; meetings with state representatives, politicians, etc.; training; discount system; quarterly publication Inwestor zagraniczny

1989

Jacek Kubica

Krakowska Kongregacja Kupiecka ul. Garbarska 14, 31-131 Kraków 12 421-2442/12 430-0481 kongregacja@kongregacja.pl www.kongregacja.pl

WND

WND

WND

Trade; gastronomy; services

Legislative initiatives; tax and legal consulting; training; member services

1410

Wies∏aw Jopek

Polish Business and Innovation Centers Association ul. Dubois 114/116, 93-465 ¸ódê 42 682-4142/42 682-4142 biuro@sooipp.org.plwww.sooipp.org.pl

239

48-480

None

Institutions supporting economic developmententerprise incubators; technology parks; technology transfer centers; training-consulting centers; loan and security funds

Meetings, lectures, training, consulting, conference and symposium organization; publishing of information and training papers; building information systems; regional and local development research

1992

Krzysztof B. Matusiak

Polish Business Club Association. Public Benefit Organization ul. Rzeêbiarska 80, 04-620 Warsaw 22 813-9797/22 870-0705 pkb@pkb.org.pl www.pkb.org.pl

200

2,000

2,000

for Polish enterprise development; business representation SMEs; transport; insurance; automotive; service- Support of members in Poland and abroad; maintenance of relations with retail companies; medical services local authorities and with the government

1990

Ryszard Konwerski

Polish Chamber of Commerce of Importers, Exporters and Cooperation ul. Âw. Marcina 80/82, 61-809 Poznaƒ 61 851-7848/61 851-7828 izba@pcc.org.pl www.pcc.org.pl

500

50-300

200

Food, metal, plastics, furniture, trade, renewable energy, automotive industry

Advisory; information; training; electronic signature

1995

Henryk Judkowiak

Polish Chamber of Information Technology and Telecommunications ul. Koszykowa 54, 00-675 Warsaw 22 628-2260/22 628-5536 biuro@piit.org.plwww.piit.org.pl

155

600-60,000

200

IT and telecom; internet; ICT services

Sector business representation in mediation with authorities; analysis of possible effects of legislation; promotion of the Polish ICT services market in government, parliament, administration and to foreign markets; economic arbitrage

1993

Wac∏aw Iszkowski

Polish Chamber of Power Industry and Environment Protection ul. Krucza 6/14, 00-950 Warsaw 2 621-3529/22 628-7838 sekretariat@igeos.pl www.igeos.pl

118

WND

WND

Power engineering

Conferences; training; consulting; promotion

1993

Dariusz Lubera

Polish Chamber of Security Alarm Systems ul. Pró˝na 12A, 00-107 Warsaw 22 620-4557/22 654-5732 pisa@pisa.org.pl www.pisa.org.pl

83

50

1000

All sectors which require technical security and support

Consultancy; surveys; specialist trainings

1994

Miros∏aw Krasnowski

Lobbying; giving opinions about legal acts, projects and budgets; participation in parliamentary committees; representation for Tripartite Commission; negotiations with trade unions; representation of Polish enterpreneurs in European institutions; support of day-today activities of members; workshops; trainings; conferences; contact with Polish and foreign experts

1999

Henryka Bochniarz

Business Centre Club Pl. ˚elaznej Bramy 10, 00-136 Warsaw 22 625-3037/22 621-8420 biuro@bcc.org.plwww.bcc.org.pl Employers of Poland ul. Brukselska 7, 03-973 Warsaw 22 518-8700/22 828-8437 sekretariat@pracodawcyrp.pl www.pracodawcyrp.pl

Polish Confederation of Private Employers Lewiatan ul. Klonowa 6, 00-591 Warsaw 022 845-9550/022 845-9551 recepcja@pkpplewiatan.pl www.pkpplewiatan.pl

2,500

Membership fee (z∏.)

www.bookoflists.pl

3,500

WND

None

Banks & financial institutions; insurance; automotive; media; food sector; chemicals; pharmaceuticals; cosmetics; aviation

Polish Merit Association ul. Miodowa 14, 00-246 Warsaw 22 504-4200/22 504-4220 zrp@zrp.plwww.zrp.pl

729

Varied

None

Construction; timber industry; artistic; automotive; food industry

Public services

1933

Jerzy Bartnik

The Polish Chamber of Commerce ul. Tr´backa 4, 00-074 Warsaw 22 630-9600/22 827-4673 kig@kig.plwww.kig.pl

156

2,400

100

Industrial and commercial sectors

Export support; training; facilitation of new commercial contacts; fairs and conference organization; promotion; public relations

1990

Andrzej Arendarski

Around 6,000

WND

WND

Construction; automotive; food industry; hairdressing and cosmetics; metals

Consulting and information services; training; qualifying exams for apprentices and professional titles; leasing of office and warehouse space

1919

Jerzy Bartnik

130

WND

500

Integrational meetings for members; lobbying; seminars; training; Construction; food industry; automotive; banking; conferences; foreign trade missions; economic information services; tourism special economic bulletins; promotion of member companies; promotion to national and foreign trade contacts

1993

Jacek Cenkiel; Henryk Judkowiak

Wielkopolska Izba RzemieÊlnicza w Poznaniu Al. Niepodleg∏oÊci 2, 65-874 Poznaƒ 61 853-7805/61 851-1316 irpoznan@irpoznan.com.pl www.irpoznan.com.pl Wielkopolski Capital Club ul. Âw. Marcin 80/82, 61-809 Poznaƒ\ 61 851-8928/61 851-8926 wkk@wkk.poznan.pl www.wkk.poznan.pl

Notes: Notes: WND = Would Not Disclose. Research for the list was done in November 2010.

All information pertains to the companies' activities in Poland. Companies not responding to our survey are not listed.

To the best of WBJ ’s knowledge, the information is accurate as of press time. While every effort is made to ensure accuracy and thoroughness, omissions and typographical errors may occur. Corrections or additions to The List should be sent, on official letterhead, to Warsaw Business Journal, attn. Joanna Raszka, ul. Elblàska 15/17, 01-747 Warsaw, via fax to (48-22) 639-8569, or via e-mail to wbjbol@wbj.pl. Copyright 2011, Valkea Media SA. The List may not be reprinted or reproduced in whole or in part without prior written permission of the publisher. Reprints are available.

22

ARTS & CULTURE

www.wbj.pl

World music

SEPTEMBER 26 – OCTOBER 2, 2011

Jazz

Aboriginal traditions Cross-cultural jazz

Geoffrey Gurrumul sings in the Yolngu language Gurrumul in concert Palace of Culture and Science Sala Kongresowa Pl. Defilad 1 October 4 World music lovers in the capital will have the chance to see Australian Aboriginal artist Geoffrey Gurrumul Yunupingu sing live in his native

tongue of Yolngu this October. As one of the first musicians from his native Australia to have made it on the international scene, he now counts Bjork, Elton John and Sting as some of his biggest fans. Best known perhaps by the name Gurrumul, the artist, who was born on the island of Elcho,

off the coast of Australia, started singing at the age of three. His songs have traditional elements that connect strongly with his people's history, tales and melodies. Tickets for the concert cost z∏.130250. ● For more information log on to kongresowa.pl

Acclaimed jazz guitarist John Scofield and Amadou & Mariam, a blind African musical duo from Mali, will perform at this event. John Scofield, who is seen as one of the most influential guitarists in the contemporary jazz world, will play music based around rhythm and blues traditions. Amadou & Mariam, who were first discovered by Manu Chao, will be visiting Poland for the second time following their initial appearance during the 2006 Open’er festival, which was seen as one of the event’s stand-out performances. Those present can expect an eclectic mix of sounds including pop, jazz and ethnic influences. ● For more information log on to kongresowa.pl

COURTESY OF ERA JAZZU

COURTESY OF REPUBLIC MEDIA

Jazz era: John Scofield / Amadou & Mariam Palace of Culture and Science Sala Kongresowa Pl. Defilad 1 October 6

This wil be Amadou & Miriam’s second visit to Poland

Film soundtrack

Classical Hollywood Symphonic concert “Pirates of the Caribbean” Palace of Culture and Science Sala Kongresowa Pl. Defilad 1 October 9 The orchestral suites from all three installments of the film “Pirates of the Caribbean”

will fill the interiors of the Sala Kongresowa on October 9. The music, composed by Klaus Badelt and Hans Zimmer, promises to be an amazing musical journey, featuring the Polish orchestra Sinfonia Iuventus. The musical number will also be accom-

panied by a choir from the Representative Artistic Ensemble of Polish Armed Forces. Tickets start from z∏.60. Advanced booking is recommended. ● For more information log on to kongresowa.pl

Museums, galleries and venues in Warsaw Centre for Contemporary Art at Ujazdowski Castle ul. Jazdów 2 www.csw.art.pl Czarna Gallery ul. Marsza∏kowska 4 www.czarnagaleria.art.pl Galeria 022, DAP, Lufcik ul. Mazowiecka 11a www.owzpap.pl Galeria 65 ul. Bema 65 www.galeria65.com Galeria Appendix 2 (Praga) ul. Bia∏ostocka 9 www.appendix2.com Galeria Asymetria ul. Nowogrodzka 18a www.asymetria.eu Galeria Foksal ul. Foksal 1-4 www.galeriafoksal.pl Galeria Milano Rondo Waszyngtona 2A (Praga) www.milano.arts.pl Galeria Schody ul. Nowy Âwiat 39 www.galeriaschody.pl

Green Gallery ul. Krzywe Ko∏o 2/4 www.greengallery.pl

Simonis Gallery ul. Burakowska 9 www.simonisgallery.com

Katarzyna Napiórkowska Art Gallery ul. Âwi´tokrzyska 32, ul.

Krakowskie PrzedmieÊcie 42/44 and Old Town Square 19/21 www.napiorkowska.pl

State Archaeological Museum in Warsaw ul. D∏uga 52 (Arsena∏) www.pma.pl

Królikarnia National Gallery ul. Pu∏awska 113a www.krolikarnia.mnw.art.pl Le Guern Gallery ul. Widok 8, www.leguern.pl Museum of Independence Aleja SolidarnoÊci 62 www.muzeumniepodleglosci.art.pl National Museum in Warsaw Al. Jerozolimskie 3 www.mnw.art.pl Polish National Opera at Teatr Wielki Pl. Teatralny 1 www.teatrwielki.pl Pracownia Galeria ul. Emilii Plater 14 www.pracowniagaleria.pl

State Ethnographic Museum ul. Kredytowa 1 www.ethnomuseum.website.pl Historical Museum of Warsaw Old Town Square 28-42 www.mhw.pl History Meeting House of Warsaw ul. Karowa 20 www.dsh.waw.pl Warsaw Philharmonic ul. Jasna 5 www.filharmonia.pl Warsaw Rising Museum ul. Grzybowska 79 www.1944.pl

Galeria XX1 Al. Jana Paw∏a II 36 www.galeriaxx1.pl

Rempex Art and Auction House ul. Karowa 31 www.rempex.com.pl

Wilanów Palace Museum and Wilanów Poster Museum ul. St Kostki Potockiego 10/16 www.milanow-palac.pl www.postermuseum.pl

Galeria Zoya ul. Kopernika 32 m.8 www.zoya.art.pl

Royal Castle Pl. Zamkowy 4 www.zamek-krolewski.com.pl

Zachęta National Art Gallery Pl. Ma∏achowskiego 3 www.zacheta.art.pl

LAST WORD

SEPTEMBER 26 – OCTOBER 2, 2011

www.wbj.pl

23

Tech Eye

COURTESY OF MICROSOFT

Microsoft’s take on the default lock screen

Windows 8’s Metro interface away billions of dollars. Where’s the evil in that, Bill?

Techeye would like to offer him a little advice: don’t bother with the poor and unfortunate. Why not build a whole new island in the Pacific? Seriously, what’s the point of being filthy rich if you can’t rule all those around you with an iron fist? He could name it something eloquent, yet snappy, like “A-hole Atoll.” And here’s the best part – he could defend his earthly paradise with a state-of-the-art defense system comprising shark- and dinosaur-launching nuclear-powered catapults.

Sounds pretty nice, right? Well, the good news is that it’s never too late to re-embrace the dark side.

And we’d hazard that the release of Windows 8, rumored for H2 2012, would be a prime opportunity, seeing as Microsoft will probably be drowning in cash afterwards.

The company recently went live with a developer preview of its nextgen operating system. Responses have been mixed so far, but Windows 8 promises something which the company is desperate for – optimized multi-touch capability. That’s not half as naughty as we’d like it to be, but Windows 8 will probably X

You may have heard of a little company called Microsoft. It’s an American outfit that peddles frumpy software based on deliberately byzantine code. And its flagship product, an operating system called “Windows,” starts up slower than a ménage `a trois between nonagenarians and is about as resistant to viruses as your average bubble boy.

That ring any bells?

Anyway, there’s this guy who used to work for Microsoft, a fellow named Bill Gates, that Techeye would like to have a chat with. He’s an interesting fellow, this Bill, a ruthless entrepreneur, a man who’s successfully sandbagged the competition hundreds of times over, leaving a trail of crushed dreams in his wake.

In other words, he’s a lot like Techeye, except that he’s neither impoverished nor teetering on the edge of professional irrelevance.

There are a lot of questions we’d like to ask Bill, starting with, “What’s Mandela really like?” And, more importantly, “What’s your major malfunction?” The thing is, Bill Gates used to be our hero, but in the past few years he’s totally lost the plot, devoting himself to running a massive charity and giving

COURTESY OF MICROSOFT

A note to Bill Gates: be more evil, please

prove a winner anyway.

It has been designed with today’s touchy-feely tablet computers in mind, which should help Microsoft improve its market share in that segment. Indeed, if you’re expecting to buy a tablet next year, now would be a good time to familiarize yourself with Windows 8’s Metro interface (pictured top left) – some competitively priced products running it will probably start appearing in late 2012.

Aside from tablet-friendliness, the OS boasts a number of other new features, like USB 3.0 support, a Windows app store and new secu-

rity measures. Those top the feature list at present, although Microsoft may have a few other things up its sleeve. We’re personally hoping for a Samuel L Jacksonvoiced artificial intelligence with a really hard to find on/off toggle, something that would delight in tormenting the computer illiterate (“You hit the sleep-mode button again? Are you serious, muthaf@#^%*!?”).

But that’s a cutting-edge feature that Windows 8 probably won’t have. All the more reason for Techeye to have that chat with Bill, and soon. ●

Ever had a personal meeting with Bill Gates? Let us know how to set one up: techeye.wbj@gmail.com